Hopewell in pact to sell power plant

Hopewell in pact to sell power plant

HONG KONG (Reuters): Hong Kong-based Hopewell Holdings Ltd.'s
chairman Gordon Wu said on Thursday that the company has reached
a provisional agreement with the Indonesian government to sell
its interest in a stalled power station project.

Wu told reporters at a construction conference in Hong Kong
that Hopewell would sell its 80-percent stake in the Tanjung Jati
B project to the Indonesian government, which would get a soft
loan to finance the acquisition.

Wu declined to give further details but said the sale, which
would finally resolve one of the nagging disputes concerning
Hopewell's infrastructure projects in Southeast Asia, would be a
"win-win loss" for the company.

"The only question now is whether the company will recover the
investment in full, although management expects to get about
US$200 million back," said Kim Eng Securities analyst Mark Po.

The company made a provision of HK$4.4 billion (US$564
million) against the cost of its investment in the project in its
1997/98 results.

Hopewell shares rose 3.76 percent to HK$4.825 on the news but
then eased to close the morning session 2.69 percent higher at
HK$4.775. Analysts expect the stock to see more upside since it
was trading at a substantial discount to an estimated net asset
value of HK$13 per share.

Hopewell has been trying to recover its investment in the
project since it was halted in February 1999 when Jakarta
announced the rationalization of its independent power projects.

Tanjung Jati B power station, once completed, will have a
generating capacity of 1,320 megawatts and is located in Central
Java, Indonesia.

Wu also said that Hopewell expected to complete talks with the
Hong Kong government in the next few months on its planned Mega
Tower Hotel in the busy Wan Chai district.

The plan, approved in 1994 as a 1,000 room, 93-storey hotel,
has been hamstrung by Hopewell's failure to acquire sufficient
land in the densely built area. Wu said on Thursday, however,
that the completed hotel would have 1,500 rooms.