China Shenhua Energy Company Ltd. (1088.HK), a unit of China's top coal producer Shenhua Group Corp. Ltd., Tuesday said it has entered into an agreement with GD Power Development Co., part of China Guodian Corp., to merge power assets to create a combined entity.
The companies will hive off their coal-fired power-generation assets into a new joint-venture company as part of broader merger between the two parent groups. GD Power will be the controlling shareholder of the joint venture, with China Shenhua contributing 29.27 billion yuan ($4.42 billion) and GD accounting for some CNY37.37 billion of the total value of assets. GD Power will also become part of the combined group.
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On Monday, Shenhua Group received notice of approval from the State-Owned Assets Supervision and Administration Commission of the State Council for the restructuring and merger of China Guodian Corporation and Shenhua Group, China Shenhua said in a stock exchange filing.
As part of the restructuring, Shenhua Group's name will be changed to China Energy Investment Corp. and it will become the parent group of the combined entity.
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(END) Dow Jones Newswires
August 28, 2017 21:22 ET (01:22 GMT)