Three Gorges nears $2.7 billion unit stake sale to CNIC, GIC

BEIJING (BLOOMBERG) - A consortium that includes CNIC Corp and Singapore's GIC are nearing a deal with China Three Gorges Corp for a 25 per cent stake in its overseas asset portfolio that could be valued at as much as US$2 billion (S$2.7 billion), according to sources familiar with the matter.

The group could reach a deal to buy the stake in China Three Gorges' international unit as soon as this week, one of the sources said, asking not to be identified as the matter is private.

The consortium also includes other funds in Greater China, the people said. Bloomberg News reported in March that Chinese state-backed fund CNIC and sovereign wealth fund GIC were among those in talks for the asset.

The hydropower company plans to use the funds raised in the potential deal to fund development of its overseas portfolio, including acquisitions, the  source said.

A US$2 billion transaction would be the company's second biggest disposal, according to data compiled by Bloomberg. In 2016 it completed the sale of Three Gorges Jinshajiang Chuanyun Hydro Development for 30 billion yuan (S$6.3 billion) to China Yangtze Power, in which China Three Gorges has a majority stake.

Negotiations are ongoing and China Three Gorges could still decide not to sell the assets, the sources said. A representative for GIC declined to comment. Representatives for China Three Gorges and CNIC did not immediately respond to requests for comment.

China Three Gorges has continued its decade-long run of acquiring overseas assets even after the United States Department of Defence added it to a list of firms said to have ties to the Chinese military, barring them from US exchanges.

The company purchased Spanish solar park assets with more than 500MW of capacity from X-Elio Energy in August last year.

It announced in February that it had agreed to acquire a 400MW renewable energy portfolio in Spain for €500 million (S$800 million).

The state-owned power giant's subsidiary China Three Gorges Renewables Group raised 22.7 billion yuan last month in an initial public offering in Shanghai, the country's biggest this year.