* First round bids due in early April - source
* Infrastructure funds, Japan trading houses likely bidders
* CLP still interested in the stake -- source
By Denny Thomas
HONG KONG, March 7 Exxon Mobil Corp has
launched an auction to sell up to $2 billion worth of shares in
a Hong Kong power venture after a year-long effort to offload
its holding to its partner yielded no result, sources familiar
with the matter said.
The world's biggest oil company by market value has hired
Barclays Plc as an advisor for the sale of nearly half
of its 60 percent stake in Castle Peak Power Co Ltd as part of
its plan to divest non-core assets.
Talks to sell the entire stake to CLP Holdings and
state-owned China Southern Power Grid had stalled due to
disagreements over valuations, the sources said. CLP owns 40
percent of Castle Peak.
The auction may attract interest from infrastructure funds,
Japanese trading houses and sovereign wealth funds, they added
without specifying names.
The process is in its early stages and potential suitors are
assessing whether to bid for the stake. First-round bids are due
in early April.
China's cash-rich state power groups have also been scooping
up assets worldwide, with dominant power distributor State Grid
Corp establishing a presence in the Philippines, Spain, Brazil
CLP, controlled by Hong Kong's wealthy Kadoorie family,
remains attracted to the stake because Castle Peak offers
guaranteed returns, one source familiar with CLP's strategy
But "the ball is in Exxon's court now," the source added.
Castle Peak operates three coal-fired power stations and has
a generation capacity of 6,908 megawatts.
CLP and Power Assets Holdings Ltd, Hong Kong's
other power supplier that is controlled by tycoon Li Ka-Shing,
garner an annual return of 9.99 percent on net fixed assets
until 2018 under a programme known as Scheme of Control.
The sources, who declined to be identified as the sale
process is confidential, said the 60 percent stake was valued at
around $3 billion last March. Around half of that plus a premium
would bring the deal value closer to $2 billion, they said.
Exxon Mobil said in an emailed statement that it does not
comment on rumours or speculation and that it routinely assesses
its global portfolio of businesses.
A CLP spokeswoman and a Hong Kong-based spokesman for
Barclays declined to comment.
CLP posted a 10.5 percent drop in its earnings last year
because of weak performances at its operations in Australia and
India. Hong Kong accounts for the bulk of CLP's earnings.