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SHANGHAI, Jun 23, 2006 -- SinoCast China Financial Watch
Spanish-based Iberdrola, a global leading renewable energy operator, is to acquire a minority stake in a Chinese power company to tap into the world fastest-growing economy. Hezhou, who has owned approximately 110 million shares, or a 70.65 percent stake in the listed arm by the end of 2005, is to continue seizing the controlling right of 41.65 percent after the deal. Based in the southern region of Guangxi, Hezhou is to sell the 45.4 million shares at CNY 4.8 apiece. Though the price represents a 20 percent premium to Guidong Electric's net asset value of CNY 4 per share audited on December 31, 2005, it is viewed somewhat cheap by some insiders. Still, in the near future, as the strategic investor, the Spain's company has to pour some investment to help Guidong Electric to launch the non-tradable share reform aimed at putting all shares public required by China Securities Regulatory Commission, explained Lu Peijun at the listed firm. Guidong Electric hopes that the alliance will help it to cut into the wind power sector as it has always focused on the hydropower sector, pointed out analyst Zhang Ke. Spurred by the news, Guidong Electric's yuan-dominated A- shares, traded at the Shanghai Stock Exchange since February 2001, gained 1.56 percent to CNY 10.39 on Tuesday. The agreement, signed by the two on June 19, is subject to approvals from several regulators, including State-owned Assets Supervision and Administration Commission, the National Development and Reform Commission, and Ministry of Commerce, for the moment. Squeezing into the global top-500 company list in 2004, Iberdrola is engaged in the exploration and development of various energy resources, such as natural gas, wind power, hydropower and nuclear power. It recently decided to buy a U.S. wind power company for USD 30 million. Based in Pennsylvania, the latter has several projects which post a combined wind power capacity of 2,200 MW along the east coast of the nation. The Spain energy giant also has signed agreements with Chinese partners to study the establishment of a new wind farm in the vast northern Chinese region which is blessed with the abundant wind power. It is considering seeking suitable locations for 1 million KW wind power generator sets. Iberdrola announced that it would have exclusive rights to study the area for five years and plans to install 300,000 KW by 2008 and 1 million KW there by the end of 2010. The wind power industry is bound to have a bright future in China as the hydropower capacity, which has exceeded 100 million KW currently, can be fully developed over the next 20 to 30 years, predicated Shi Pengfei, vice-chairman of the Chinese Wind Energy Association. The top economic planning agency National Development and Reform Commission has just boosted the wind power capacity target to 5 million KW in 2010 and 30 million KW in 2020 from the original figures thanks to the rapid growth. The potentially big market, with scale to climb to CNY 30 billion or so in 2010, is believed to attract numerous global top wind power generation equipment makers to enter. (USD 1 = CNY 8.0) News Provided By |
