China Shenhua and Guodian Electric Power Announcement: the proposed party for the energy industry large state-owned enterprises

2017-07-04

July 3 evening, since the beginning of June to suspend the sale of China Shenhua and Guodian power to continue to suspend the announcement. According to the disclosure of the two sides of the information, the two major energy group transaction content gradually clear, outside the coal power enterprise restructuring speculation is further confirmed.

China Shenhua said the controlling shareholder Shenhua Group Co., Ltd. (hereinafter referred to as Shenhua Group) intends to plan major matters involving the company, may constitute a major asset transactions involving the company, to seek the views of the relevant ministries, is a major precedent, the company A shares The stock was suspended on June 5. According to the resolution of the board of directors, the company's stock continued to be suspended until August 4. The announcement said, according to Shenhua Group's notice, as of now, the parties are still on the transaction-related matters to communicate and consultation. The transaction is intended for the energy industry large state-owned enterprises; transactions involving the energy industry assets, the scope of assets has not yet been finalized; transaction mode is to discuss, argumentation. At present the matter is planning the process, there are still uncertainties.

On the same day, Guodian Electric Power said in the announcement, the controlling shareholder of China Guodian Corporation (hereinafter referred to Guodian Group) plans to involve the company according to the law subject to prior approval of major issues, and the major issues may constitute a major asset restructuring. In order to avoid abnormal fluctuations in the stock price, the company's stock will continue to be suspended, the suspension time is expected to no more than 1 month.

The State Power Electric announced that according to Guodian Group notice, the major asset restructuring of the other side of the initial intention of the energy industry for large state-owned enterprises, the underlying assets for the energy industry assets. At present, the proposed reorganization of the underlying asset range has not yet been finalized, the transaction is being discussed, the argument.
June 4, China Shenhua announced that on June 2 received the company's controlling shareholder Shenhua Group notice, was informed that it intends to plan involving the company's major issues, A shares from June 5 from the suspension. At the same time, Guodian Group, a subsidiary of Guodian Power and Guodian Branch and Longyuan Electric Power also issued a similar announcement.

Shenhua Group insiders said that Guodian Group is the world's largest installed capacity of wind power company, Shenhua Group is the world's largest coal enterprises, if Shenhua and Guodian merger, both sides are beneficial. On the one hand, Shenhua carbon emissions larger, Guodian can make up for this problem; the other hand, the Guodian, in the short term thermal power is still the mainstream case, Shenhua can provide a stable supply of coal, including wind power New energy will be the direction of long-term development, but short-term profits may be poor, Shenhua can provide some financial support.
As of the end of December 2016, Guodian Group's total assets reached 803.1 billion yuan. According to Shenhua official disclosure of the latest data, as of the end of April 2017, Shenhua Group total assets of 1014.3 billion yuan, breaking the trillion yuan, compared with the establishment of Shenhua Group in 1995 increased by 1003.2 billion yuan, an increase of 91 times; 2016 operating income 247.9 billion yuan, profits of 36.1 billion yuan, respectively, compared with 1995 increased by 354 times and 516 times.

Since last year, rumors about coal and electricity reorganization have been rampant. China Enterprise Research Institute chief researcher Li Jin said earlier that the reform of state-owned enterprises in 2017 is expected to carry out large-scale mergers and acquisitions, large-scale power industry restructuring is imperative. Because compared to other industries, the power industry, the number of central enterprises is too high, the merger and reorganization can effectively reduce the duplication of construction and ineffective investment, reduce competition.