BEIJING (Reuters) - Datang Group, one of China’s biggest power generators, said a subsidiary in northwestern Gansu province that operates a coal-fired power station has applied for bankruptcy and liquidation after it defaulted on about 16.44 million yuan ($2.39 million) of debt.
China’s coal-fired power producers are struggling as Beijing promotes the use of renewable energy and opens up the state-controlled power market. Another Datang Group coal-fired plant went bankrupt last December.
Datang International Power Generation Liancheng Power Plant in Gansu, which has a total installed capacity of 660 megawatts, had total assets of about 594 million yuan and 1.77 billion yuan of debt by the end of May, Datang International said in a filing to the Shanghai Stock Exchange late on Thursday.
Datang Group owns 55% of Datang International Power, while state-owned China Guodian Corporation [CNGUO.UL] owns 25% and the provincial government-backed GEPIC Energy Development Co has a 20% stake.
“(A) court has accepted creditors’ application for bankruptcy and liquidation of Liancheng power plant... and made (a) declaration on insolvency of the firm for settlement of outstanding debt,” Datang in the file.
In December, Datang announced the bankruptcy of its Baoding Huayuan thermal power plant after it failed to pay out billions yuan of debt.
China’s total investment in thermal power construction in 2018 was the lowest since 2004 and more than half of the country’s coal-fired power plants have been in the red for two years, according to data from the China Electricity Council.
Datang International’s net profit fell 17.5% in 2018.
Reporting by Muyu Xu and Dominique Patton; Editing by Susan Fenton