What’s new: The State-owned Assets Supervision and Administration Commission (SASAC), the central government’s state assets regulator, has raised its stake in China Southern Power Grid Co. Ltd. to 51% from 26.4% as part of the company’s new ownership restructuring plan aimed at improving corporate governance.
The ownership change was announced at a company conference that Southern Power Grid held Saturday to talk about how it could achieve high quality development by optimizing its ownership structure. The restructuring plan, approved by the State Council, can be seen as an important measure to promote the development of China’s power industry and ensure the country’s energy security, SASAC Chairman Hao Peng said.
The state assets regulator also said that the plan will provide a golden opportunity for Southern Power Grid to improve its corporate governance as the state-run company steps up efforts to become carbon neutral.
While SASAC is now Southern Power Grid’s controlling stakeholder, the Guangdong provincial government, formerly the company’s biggest shareholder, saw its holdings shrink to 25.57% from 38.4%. China Life Insurance Group Co. Ltd. and the Hainan provincial government’s holdings in the grid operators fell to 21.3% and 2.13%, down from 32% and 3.2%, respectively.
The background: Southern Power Grid was established in 2002, with the Guangdong provincial government, State Grid Corp. of China and the Hainan provincial government controlling 70.4%, 26.4% and 3.2% of the company, respectively.
Since then, Southern Power Grid has gone through on two rounds of ownership restructuring. One happened in 2006 when the Guangdong provincial government transferred its 32% stake to China Life Insurance Group. The other took place in 2012 when State Grid sold its entire 26.4% holding to SASAC.
Currently, Southern Power Grid provides electricity to the provinces of Guangdong, Yunnan, Guizhou and Hainan, as well as Hong Kong, Macao and the Guangxi Zhuang autonomous region. The company said that it made a net profit of 9.8 billion yuan ($1.5 billion) in the first three quarters of this year, up 120% year-on-year.
Contact reporter Ding Yi (yiding@caixin.com) and editor Heather Mowbray (heathermowbray@caixin.com)
Get our weekly free Must-Read newsletter.
