Mitsubishi Corp, Japan's largest trading company, will buy a 20 percent stake in a Taiwanese power plant for US$250 million from CLP Holdings Ltd (
Mitsubishi will gain the stake in the Ho-Ping project, a 1,325 megawatt coal-fired power plant, through OneEnergy Ltd, which is equally owned by the Japanese company and CLP Holdings, Carl Kitchen, CLP's public affairs manager, said by telephone yesterday.
Hong Kong-based CLP will book a HK$1 billion (US$120 million) gain from the sale, it said in a stock exchange statement yesterday.
Mitsubishi is investing in Taiwan's power industry as capacity expansion on the nation lags behind demand growth.
Taiwan may have a shortage of electricity in five years unless additional generators are built, the Ministry of Economic Affairs said last June.
"Japanese trading companies are expanding their power producing business in emerging countries, where electricity demand is increasing," said Yasuhiro Narita, an analyst at Nomura Securities Co in Tokyo.
"The contributions of the acquisition to Mitsubishi's profit may be limited but it will be getting a steady return from the defensive sector," he said.
Mitsubishi's shares rose 2 percent to ?2,785 in Tokyo.
CLP shares fell 0.7 percent to HK$55.20 at the stock exchange's 4pm close in Hong Kong.
OneEnergy will pay US$410 million in cash for CLP's 40 percent stake in Ho-Ping with the remainder to be settled by the issue of 9,000 new OneEnergy shares to CLP, the bigger of Hong Kong's two power suppliers said in the statement. Taiwan Cement Corp (
CLP, controlled by the family of chairman Michael Kadoorie, formed OneEnergy with Mitsubishi in March last year to develop power plants in Southeast Asia and Taiwan. The 106-year-old company is expanding abroad to counter slow earnings growth in Hong Kong.
Kadoorie and his family have a net worth of US$3.8 billion and rank 174th on Forbes list of billionaires, according to the magazine's annual survey last March.
The transfer of the stake is "in line with the business strategies," CLP said in the statement. "OneEnergy has been established as the exclusive power sector investment vehicle in Southeast Asia and Taiwan for its two shareholders."
A Mitsubishi spokesman declined to comment when reached by phone today. The transaction is expected to be concluded on March 30.
Mitsubishi and CLP will invest US$670 million to develop power plants in Taiwan and Southeast Asia, the companies said last March.
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