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China Resources Power buys plant stake from Mirant

2 January 2003 – US energy producer and trader Mirant said on Tuesday it has sold its 33 per cent stake in a south China power plant to state-owned China Resources Power Holding Co Ltd for $300m.

The sale to China Resources Power boosts its liquidity to $1.4bn and eliminates a $254m loan at its Asian subsidiary. The elimination of this loan removes a previously disclosed dividend block from Mirant’s Asian business.

Shajiao C is a 1960 MW power plant located near Hong Kong and is the largest coal-fired power plant in the Guangdong Province. Mirant originally purchased its 32 per cent economic interest in Shajiao C as part of the company’s acquisition of Consolidated Electric Power Asia in 1997. Mirant purchased an additional 1 per cent interest in 2001 when it acquired Laito Company Limited, a minority shareholder in the project.

China Resources Power is a mainland-based affiliate of Beijing’s Ministry of Foreign Trade and Economic Co-operation (Moftec) and was one of five firms reportedly in the running for Mirant’s stake in the facility in Guangdong province, a booming industrial region where the supply of electricity lags demand.

Following the sale of Mirant’s interest in Shajiao C, the company’s remaining Asian assets are its seven power plants in the Philippines and one power plant on Guam. The sale of Mirant’s assets in Asia and worldwide is aimed at a strengthening of its balance sheet.

In December, debt-laden Mirant posted a net loss of $1m for its third quarter.