China State Grid to sell power generation assets worth $7.9B

The State Grid Corp of China plans to sell a coal and power generation unit with assets worth about $7.9 billion to Shenhua Group.

The sale of State Grid Energy Development Co Ltd has yet to be approved by the State-owned Assets Supervision and Administration Commission.

"The divesture conforms to State Grid's plan and will strengthen Shenhua's competitive advantage in thermal power generation," one source said.

Shenhua Group is the parent of China Shenhua Energy Corp Co Ltd , which runs a big network of power plants and produces the largest volume of coal among Chinese miners.

State Grid Energy Development Co had 55 billion yuan of assets at the end of 2011, accounting for about 2.5 percent of SGCC's total. The unit made a net profit of 78 million yuan last year on revenue of 18.9 billion yuan.

State Grid news department officials could not immediately comment, and a news official with Shenhua denied having any knowledge of the deal. Government officials at SASAC were not available for comment.