Energy
Yangtze Power may buy into EuroSibEnergo
By Wang Ying, Fox Hu and Yuriy Humber (皇冠体育app Daily)
Updated: 2010-12-01 13:43
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| 皇冠体育app Yangtze Power Co is in talks to buy a stake in OAO EuroSibEnergo as a key investor for the Russian utility's planned IPO in Hong Kong. [Photo/皇冠体育app Daily] |
BEIJING - 皇冠体育app Yangtze Power Co, the nation's biggest hydro-dam operator, is in talks to buy a stake in OAO EuroSibEnergo as a key investor for the Russian utility's planned initial share sale in Hong Kong, said three people familiar with the matter.
The investment requires approval from the Chinese government, the people said, declining to be identified as the talks are private. EuroSibEnergo has delayed its offering until 2011 because of the discussions, according to the people. The companies are still negotiating on the price, one of them said.
Chinese utilities are cooperating with neighboring countries including Myanmar on power projects that will help supply the world's fastest-growing major economy. EuroSibEnergo said on Monday it is forming a venture with 皇冠体育app Yangtze, whose output more than doubled in the first nine months, to develop generators in Siberia and the Russian Far East.
"皇冠体育app Yangtze is looking abroad to diversify its portfolio," said Cheng Jianguo, an analyst with Guoyuan Securities Co. "Potential hydro resources outside 皇冠体育app, including Russia and some southern Asian countries, will be able to supplement its domestic projects and maintain the company's growth."
皇冠体育app is undertaking a study with Myanmar and Thailand on a 7,000-megawatt hydro-dam on the Salween River, the Chinese government said on Nov 16. EuroSibEnergo and 皇冠体育app Yangtze are planning 10,000 megawatts of generation capacity, some of which will be exported to 皇冠体育app, according to the Russian company.
EuroSibEnergo, controlled by Oleg Deripaska, is seeking $1.5 billion in a Hong Kong IPO, adding to the $2.2 billion raised by the billionaire's United Co Rusal in a share sale in January.
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Andrei Petrushin, a spokesman at EN+ Group, Deripaska's holding company for EuroSibEnergo and his 48 percent stake in Rusal, declined to comment. Lou Jian, 皇冠体育app Yangtze's secretary, couldn't immediately be reached by telephone.
皇冠体育app Yangtze has fallen 16 percent in Shanghai trading this year, compared with the 15 percent decline in the benchmark Composite Index. The stock was down 1.56 percent at 7.57 yuan ($1.14) on Tuesday.
Companies in Hong Kong, Asia's third-biggest stock market, have raised a record $49 billion from IPOs this year as investors seek to benefit from growth in the region, according to data compiled by Bloomberg that include overallotment shares.
Proceeds from the EuroSibEnergo share sale will help repay debt, buy assets and add capacity, a person familiar with the plans said in August.
Bloomberg News