AES in talks to sell major coal-fired power plant in Vietnam - sources

AES

17/11/2023 06:40

* 
      Czech energy firm Sev.en in talks for AES's 51% stake
    

        * 
      US energy firm AES wants to sell all coal assets by end of
2025
    

        * 
      Korea's Posco is planning to sell its 30% stake -
spokesperson
    

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      China sovereign wealth fund CIC holds 19% stake in the
plant 
    

  
    By Francesco Guarascio, Jan Lopatka and Ju-min Park
       HANOI/PRAGUE/SEOUL, Nov 17 (Reuters) - U.S. energy firm
AES Corp.  AES.N  is in talks to sell its majority stake in one
of Vietnam's largest coal-fired power plants, two people
familiar with the discussions said, as part of its global
strategy to divest coal assets by the end of 2025.
    AES is discussing the sale with Sev.en Global Investments,
the financial vehicle for foreign acquisitions of Czech energy
firm Sev.en Group, ultimately owned by billionaire Pavel Tykac,
the two people told Reuters, declining to be named because no
deal had been finalised yet.
    It was not clear if AES was in talks with other potential
buyers.
    The plant's second-largest shareholder, South Korea's energy
firm Posco International  047050.KS , told Reuters it was also
considering selling its 30% stake, but did not elaborate
further.
    AES had no immediate comment. Sev.en declined to comment.
    AES is one of the U.S. largest investors in Vietnam, mostly
involved in the coal power business there. Its divestment would
come as chipmaker Intel  INTC.O , which also runs a major
operation in the Southeast Asian nation, shelved a planned
expansion there. 
    U.S. President Joe Biden visited Vietnam in September and
signed deals to boost investments in the country. AES wants to
build a liquefied natural gas (LNG) terminal and gas-fired power
plant in Vietnam.
    AES had tried to sell its 51% stake in the 1.2 gigawatt Mong
Duong 2 coal-fired power plant in 2021 but the deal fell through
after the company said it signed a sale agreement with a
consortium led by an undisclosed "U.S.-based investor". 
    The sources did not say how much AES's stake could be valued
at under the current deal being considered.
    Posco's 30% stake was valued at $185 million when it had
tried to sell in 2021, according to a regulatory filing from the
company. That deal, which collapsed like the AES one did, would
have valued the plant at over $600 million.
    Sovereign wealth fund China Investment Corporation (CIC),
which owns the remaining 19% stake in the plant, is considering
selling under the terms agreed by AES with potential buyers, one
of the sources said.
    It is unclear whether CIC was also considering a potential
sale to a possible buyer of Posco's stake.
    CIC did not reply to a request for comment.
        The ownership of the Mong Duong 2 plant is scheduled to
be transferred to the Vietnamese state by 2040, a quarter of a
century after it began operations.
    Vietnam wants to end power generation from coal by 2050,
under commitments that have attracted funding pledges from Group
of Seven (G7) members and are expected to be fine tuned at the
UN Climate Change Conference which begins on Nov. 30 in Dubai.
    Sev.en is focussed on acquiring coal assets and other fossil
industries as their prices drop amid the global trend to phasing
them out - a business strategy that environmental activist
Greenpeace said made the company a "climate change villain" .
    "Without doubt this will end one day, but at the moment
there are opportunities in this sector," Tykac, whose net worth
Forbes estimates at $8 billion, told Reuters in May.         

 (Reporting by Francesco Guarascio @fraguarascio in Hanoi and
Jan Lopatka in Prague; additional reporting by Khanh Vu in
Hanoi, Ju-min Park and Joyce Lee in Seoul, Roxanne Liu in
Beijing; Editing by Raju Gopalakrishnan)
 ((Francesco.Guarascio@thomsonreuters.com;))