China Yangtze Power Co.Ltd(600900) (600900) on December 26, China Yangtze Power Co.Ltd(600900) received the inquiry letter issued by the Shanghai Stock Exchange, the core content of which is the influencing factors of the water inflow of the assets to be acquired.
On the evening of December 10, the plan for major asset restructuring was disclosed. It is planned to purchase 100% equity of Three Gorges Jinsha River Yunchuan Hydropower Development Co., Ltd. (hereinafter referred to as “Yunchuan company”) jointly held by Three Gorges group, Three Gorges investment, Yunneng investment and chuanneng investment by issuing shares, issuing convertible bonds (if any) and paying cash, and raise funds at the same time, After the acquisition, the total installed capacity of China Yangtze Power Co.Ltd(600900) holdings will increase to 71.795 million KW, an increase of 57.46%.
According to the reply of the Three Gorges group, the Three Gorges investment will transfer 40% of the equity of Yunchuan company it holds to the Three Gorges group free of charge. After the free transfer, Three Gorges group and Three Gorges investment participated in the transaction with 40% and 30% equity of Yunchuan company held by them respectively.
proposed to acquire 100% equity of Yunchuan company
China Yangtze Power Co.Ltd(600900) with large-scale hydropower operation as its main business, it manages and operates six giant hydropower stations such as the Three Gorges, Gezhouba, Xiluodu, Xiangjiaba, Wudongde and Baihetan (including Wudongde Hydropower Station and Baihetan Hydropower Station currently entrusted to management). As of September 30, 2021, the company holds a total installed capacity of 45.595 million kW (excluding Wudongde Hydropower Station and Baihetan Hydropower Station currently entrusted), ranking among the top companies in the global hydropower industry.
China Yangtze Power Co.Ltd(600900) according to the previously disclosed announcement, Yunchuan company to be acquired in this transaction is the investment and operation subject of Wudongde and Baihetan Hydropower Stations. Wudongde Hydropower Station has an approved installed capacity of 10.2 million KW and has been fully put into operation; The approved installed capacity of Baihetan Hydropower Station is 16 million KW. At present, some units have been put into operation. After the completion of this transaction, the listed company has 6 giant cascade hydropower stations in the main stream of the Yangtze River, and the holding total installed capacity will increase to 71.795 million KW, an increase of 57.46%.
China Yangtze Power Co.Ltd(600900) said in the announcement at that time that the core business of the listed company was still power production, operation and investment, and the main business had not changed significantly. The joint dispatching capacity of Listed Companies in the Yangtze River Basin will be further enhanced, which will help promote listed companies to expand and strengthen hydropower business, highlight the main business status of hydropower, and consolidate the status of listed companies as world hydropower giants.
It should be noted that this transaction also has an important background, that is, in 2016, when China Yangtze Power Co.Ltd(600900) controlling shareholder Three Gorges group injected China Yangtze Power Co.Ltd(600900) into Xiluodu and Jiaba hydropower station, it made a commitment to avoid horizontal competition. At present, Wudongde and Baihetan Hydropower Stations have been put into operation successively, with good operation indicators of hydropower station units, stable and orderly safety production, and the conditions for asset injection have been met at this stage. Therefore, the implementation of this transaction is the embodiment of the Three Gorges group’s active fulfillment of its commitments in the capital market.
China Yangtze Power Co.Ltd(600900) said that at the same time, promoting the overall asset securitization of Wudongde and Baihetan Hydropower Stations is also conducive to further deepening the reform of state-owned enterprises, expanding state-owned capital, further enhancing asset quality, liquidity and anti risk ability, and effectively maintaining and increasing the value of state-owned assets.
Shanghai stock exchange sent a letter asking
It is worth mentioning that Wudongde and Baihetan Hydropower Stations, the main assets of Yunchuan company, are located in the lower reaches of Jinsha River Basin. The power generation and operating performance of the hydropower station are obviously affected by the water inflow of the river basin. The uncertainty, seasonal fluctuation and difference of water inflow will have an important impact on the power production and operating performance of Yunchuan company.
Because of this, the Shanghai Stock Exchange asked China Yangtze Power Co.Ltd(600900) in the inquiry letter to specify the main factors affecting the follow-up water inflow of Yunchuan hydropower station, focusing on the impact of unnatural factors; At present and in the foreseeable future, the distribution of hydropower stations and water storage capacity in the middle and upper reaches of Jinsha River Basin, and evaluate the impact of the above hydropower station water storage policy on the power generation capacity of hydropower stations subordinate to Yunchuan company; Whether Yunchuan company has formed joint dispatching agreement or other arrangements with other hydropower stations in Jinsha River Basin, and whether it can reduce the impact of unnatural factors on the water inflow of hydropower stations; If the power generation of the hydropower station subordinate to Yunchuan company is greatly affected by the water inflow of the river basin, it is necessary to fully prompt the risk.
In addition, according to the China Yangtze Power Co.Ltd(600900) announcement, Baihetan Hydropower Station is still in the construction period and has not been fully put into operation for power generation. There are still some unfinished works in the project, and the final final completion settlement of the project has not been carried out. If the final settlement amount of future project completion is different from the current actual project cost, it will lead to the adjustment of the current recorded asset value.
In this regard, the Shanghai stock exchange requires China Yangtze Power Co.Ltd(600900) to supplement and disclose the current construction progress of Baihetan Hydropower Station, the proportion of power generation currently put into operation and the estimated completion time; Explain the capital scale, capital source, corresponding capital cost to be invested in the full operation and power generation of Baihetan Hydropower Station, and whether relevant factors are considered in the transaction consideration; The unit scale, grid connection time, power generation and profitability of Baihetan Hydropower Station.
In addition, the current business performance of Wudongde Hydropower Station project and whether the completion of Baihetan Hydropower Station will affect the water inflow / power generation of Wudongde Hydropower Station are also the main issues mentioned in the inquiry letter of Shanghai Stock Exchange.
(Securities Times)
