Huadian Power buys 45% equity interest in Yinxing Coal

Sep. 23, 2009 (China Knowledge) - Huadian Power International Corp<600027><1071>, China's largest independent power producer, recently signed an agreement with Ningxia Electric Power Group Co Ltd to acquire a 45% equity interest in Ningxia Yinxing Coal, sources reported.

Huadian Power said in a statement filed with the Shanghai Stock Exchange that it will spend RMB 600 million to complete the acquisition. Ningxia Electric Power Group will retain a 55% equity interest in Ningxia Yinxing Coal.

The acquisition will give Huadian Power the right of first refusal on 45% of the coal produced by Ningxia Yinxing Coal.

Huadian Power will help Ningxia Yinxing Coal develop its two major coal mines, which have a combined annual production capacity of 5.8 million tons.

Reportedly, Huadian Power made several acquisitions this year, expanding upstream into the coal business. The firm bought a 70% equity interest in each of two coal mining enterprises in Shanxi Province, according to Huadian Power's statement filed with the Shanghai Stock Exchange.

Huadian Power recorded RMB 546 million of net profit in the first half of this year, compared with a loss of RMB 4.92 million a year earlier.