PowerGen sells Asia assets to CLP

PowerGen sells Asia assets to CLP

LONDON (Reuters): UK electricity company PowerGen Plc on
Thursday said it had sold a group of Asian assets put up for sale
earlier this year for 458 million pounds (US$662 million)
including debt.

The assets were sold to companies managed and 80-percent owned
by Hong Kong-based power group CLP Holdings Ltd, formerly China
Light and Power.

The divestments in Australia, India and elsewhere in Asia are
for a cash payment of 286 million pounds plus the assumption of
debt.

On top of sales already announced, this will allow the company
to reduce debt by more than 890 million pounds, close to its
target of over one billion.

"It was a pretty bad number (for PowerGen), nothing like book
(value), said one fund manager who avoids the stock. "I'm
relieved to see they've managed to get rid of it at all though".

The company on Wednesday obtained final U.S. regulatory
clearance for its planned $3.2 billion acquisition of U.S.-based
LG&E Energy Corp.

The company is refocusing its business on Britain and the
United States where it sees better growth potential and earnings
security.

The assets involved include PowerGen's 88-percent stake in a
power station in the western Indian state of Gujarat and
development projects there, a 50 percent interest in a coal-fired
power station in Map Ta Phut, Thailand, and a 49.95 percent stake
in Yallourn Energy in Australia.

PowerGen said CLP was also buying a 42 percent stake in
Yallourn from other shareholders. The controlling interest in the
1,450 megawatt brown coal generator in the southern state of
Victoria is the company's first step into the Australian market
after past unsuccessful bids for assets there.

PowerGen's interest in PT Jawa Power in Indonesia may also be
bought by CLP within the next five years, PowerGen said.

For PowerGen the disposal program is aimed at keeping debt
levels down while it absorbs the costs of buying Kentucky-based
LG&E.

PowerGen and LG&E said on Wednesday they had received
regulatory approval from the U.S. Securities Exchange Commission,
the last hurdle to the merger.

The deal creates a global power company with assets of nearly
$12 billion and total revenues of $8.7 billion, serving four
million customers worldwide.