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State Power Giant Weighs Floating Financial Assets

By Chen Xuewan and Han Wei / Mar 26, 2019 03:59 AM / Business & Tech

Photo: VCG

Photo: VCG

China’s state-owned power giant State Power Investment Corp. is moving to float its financial assets through a back-door listing as part of a broader reform among state-owned enterprises.

Shenzhen-listed Dongfang New Energy Corp., a unit 33.4% owned by State Power Investment, said during the weekend that it would issue new shares to fund a takeover of State Power Investment Capital Holding Co., the power giant’s wholly owned financial services arm.

The deal would allow State Power Investment to transfer its financial service assets, including insurance, futures, trust and asset management, to the listed vehicle.

State Power Investment Capital has registered capital of 4.77 billion yuan ($710 million). In 2017, the company posted revenue of 6.6 billion yuan with net profit of 3 billion yuan, contributing nearly 33% of the parent company’s total profit that year, latest company data showed. By the end of 2017, the Capital unit had total assets worth more than 100 billion yuan.

Li Rong, a power industry analyst at Cinda Securities Co., said the deal is in line with the central government’s push to diversify ownership of SOEs and encourage big state companies to separate core and non-core businesses. Meanwhile, the listing plan will also grant State Power Investment access to new capital and support its efforts to reduce leverage.

State Power Investment already owns nine listed arms including two units listed in Hong Kong units and seven listed on mainland markets.

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