AES to sell most of China assets for $134 million
(Reuters) - Power company AES Corp (AES.N) will sell a majority of its businesses in China for a total of $134 million, as it is unable to pass on higher coal costs in a state-regulated industry.
The sale of about 2,727 MW gross capacity of the plants is expected to close by the second half of 2012, the company said.
"Narrowing our geographic focus and investing in our core markets better positions us for long term earnings growth," Chief Executive Andres Gluski said in a statement.
The Virginia-based company will sell its 25 percent equity interest in the coal-fired Yangcheng plant and its 49 percent stake in the China Wind joint venture for $86 million.
AES also said it would sell its 49 percent interest in Jianghe Rural Electrification Development Company Ltd to its joint venture partner China Three Gorges New Energy Corp for $48 million.
Chinese independent power producers such as Huaneng Power International Inc (HNP.N) and Datang International Power Generation Co Ltd (0991.HK), which generate power but do not own grid assets, have seen a sharp decline in their business in recent years as coal prices have surged.
AES's China operations include gas and coal-fired plants, hydropower stations and wind power capacity in provinces such as Hebei, Jiangsu, Sichuan and Zhejiang, according to a company factsheet as of November last year.
Shares of the company closed at $12.08 on Friday on the New York Stock Exchange.
(Reporting by Durba Ghosh in Bangalore; Editing by Gopakumar Warrier)
- Wells Fargo & Co, the fourth-largest U.S. bank, reported a 39 percent drop in mortgage revenue for the second quarter as lending volume dropped, underscoring the urgency for the bank to find other sources of income growth. | Video
BEIJING/HONG KONG - China reiterated its opposition on Thursday to a European Union plan to limit airline carbon dioxide emissions and called for talks to resolve the issue a day after its major airlines refused to pay any carbon costs under the new law.