A UNIT of Shenhua Group Corp., China’s biggest coal miner, wants to sell its stake in Huaneng International Power Development Corp. for more than US$800 million, as China’s State-owned companies cut cross-shareholdings to ease government-mandated market reforms.

    Guohua Energy Investment Co., a Shenhua unit focused on renewable energy, aims to sell its 15.77 percent stake in Huaneng for 4.97 billion yuan (US$809 million), according to a document posted to the China Beijing Equity Exchange dated Sept. 18.

    Huaneng Group, the power development unit’s biggest shareholder with 51.98 percent, has the right to buy ahead of other potential bidders, according to the document.

    The move comes amid China’s push to restructure State-controlled companies and allow markets a bigger role in the allocation of resources. Reducing shareholders and consolidating assets clears a path to allow parent companies to sell businesses to their listed units, to improve efficiency, transparency and corporate governance.

    “Huaneng is probably trying to narrow down its number of minority shareholders and make things easier when they get ready to inject the parent’s assets into the listed company,” said Shi Yan, a Shanghai-based analyst at UOB-Kay Hian Ltd. “This kind of minority shareholding also doesn’t make sense for the Shenhua unit as it focuses more on new energy rather than traditional types.”

    Huaneng’s power development unit holds 36.5 percent of Hong Kong-listed Huaneng Power International Inc., the biggest publicly traded power generator in China, according to Huaneng Power’s website. Any buyer would need to have power generation as its main business and pay off the transaction within a year, according to the statement.

    (SD-Agencies)