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BIZCHINA / Center |
State Grid plans to sell over 100 billion yuan in assetsBy Shangguan Zhoudong (chinadaily.com.cn)
Updated: 2007-07-26 15:57 Branches of the State Grid Corp of China (SGCC), the nation's largest power transmission company, are selling non-transmission assets worth more than 100 billion yuan (US$13.23 billion), the Shanghai Securities News reported. Some reviewers said the move is to raise money because State Grid needs around 1 trillion yuan for construction during the 11th Five-Year Program (2006-10). Statistics show that the assets to debt ratio of State Grid is high at 60.43 percent and its return on equity stand at only 3.83 percent. In addition to poor financial performance, the power transmission company also hopes to list, so the selling of non-core assets is better for changing its financial conditions. But a source at Beijing Electric Power Industry Development Corporation, a subsidiary of Beijing Electric Power Corp, denied the "money raising" comment. The source said State Grid has no lack of money and the move is in an effort to spin off non-core assets. State Grid recently ordered its provincial branches to spin off enterprises involved in diversified operation to standardize these branches. Beijing Electric Power Corp invested in some projects in power equipment, construction, supervision and supply. A total of 20 State owned projects invested in by Beijing Electric Power Industry Development Corp were listed on the Beijing Equity Exchange for sale. |
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