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.