King & Wood Mallesons is assisting SSE-listed Huaihe Energy on a proposed acquisition of its subsidiary, Huaihe Energy Electric Power Group, for RMB11.69 billion (USD1.64 billion).
Huaihe Energy plans to acquire an 89.3% stake in the subsidiary through a combination of a share issuance and cash payment. The SSE has approved the acquisition and on completion, Electric Power Group will become Huaihe Energy’s wholly owned subsidiary.
Under the deal, RMB1.75 billion will be paid in cash, while RMB9.94 billion will be settled through a share issuance. Huaihe Energy will issue 3.28 billion new shares at RMB3.03 apiece, increasing its total stock to 7.17 billion shares after the issuance.
The controlling shareholders of Huaihe Energy, Huainan Mining and concerned parties, will increase their combined shareholding from 63.27% to 80.08%, and the State-owned Assets Supervision and Administration Commission of Anhui province will remain as the actual controller of the company.
King & Wood Mallesons is counselling Huaihe Energy, with partners Tang Lizi and Gao Zhao in charge of the project.
Huaihe Energy focuses on thermal power generation, electricity sales, railway transportation and coal blending, which coincides with Electric Power Group. Following the restructuring, Huaihe Energy’s thermal power business is expected to expand further, with improvements to its operational efficiency through business integration, cost reduction and performance advances.
