Wei Qiao Textile: Diversion Of Thermoelectric Assets Will Further Reduce Power Generation Costs

Wei Qiao

Recently, the thermoelectric asset replacement agreement with the holding company, Shandong Wei Qiao venture, was announced.

The holding company sold its seventh thermal power plant to Wei Qiao for about 4 billion 368 million yuan, while the latter paid for the Wei Qiao thermal power plant with a value of 3 billion 836 million yuan and 532 million yuan in cash.

For the reason why the seventh thermal power plant is put into the listed company, Wei Qiao textile said that the Wei Qiao thermal power plant has been operating for more than 8 years, and the seventh thermal power plant has been gradually put into operation since the fourth quarter of 2013, and the efficiency is even higher.

It said that after the completion of the acquisition, the cost of electricity generation is expected to decline.

An analyst told the Economic Herald reporter that the price of this part of the assets sold by Wei Qiao textile is also very high, and the future use is also worthy of attention. Large shareholders may also pform the old thermal power plant.

The cost of generating electricity is about 30% lower.

The data show that the seventh thermal power plant, which was built in May 2010, is located in Changshan Town, Zouping County, which has been gradually put into operation in the fourth quarter of last year, with a installed capacity of 1320 megawatts.

The original purchase cost (construction cost) of the power plant is about 4 billion 491 million yuan.

In August 31st this year, the seventh thermal power plant in Shandong Wei bridge.

The book value of the account book is about 3 billion 991 million yuan.

The acquisition of Wei Qiao textile mainly includes thermoelectric facilities and land use rights.

The Wei Qiao thermal power plant, which is sold, mainly includes thermoelectric facilities, such as buildings, machinery and equipment, and construction projects.

According to the agreement, Wei Qiao textile will pfer the Wei Qiao thermal power plant to the holding company within 5 business days after the completion of the thermoelectric asset replacement agreement, and pay in cash by way of cash to offset the difference in value between the seventh thermal power plant and the Wei Qiao thermal power plant (532 million yuan).

In view of the benefits of thermoelectric asset replacement agreements, Wei Qiao textile says that the unit capacity of the Wei Qiao thermal power plant is between 30 MW and 60 MW, while the seventh thermal power plant has 330 MW generating capacity per unit and the equipment is more environmentally friendly.

Seventh the power generation cost per kilowatt of the thermal power plant is about 30% lower than that of the Wei Qiao thermal power plant at present.

Wei Qiao textile emphasizes that the acquisition of large power plants will avoid potential investments in building large power plants.

Since the existing power grid of Wei Qiao textile can be used to pport the power produced by the seventh thermal power plant, production and operation will not be adversely affected.

Wei Qiao

In the announcement, it was also mentioned that, considering that the seventh thermal power plant operated by a holding company may be affected by relevant laws and regulations, government policies and the operation of Wei Qiao textile, including, but not limited to, the possible energy shortage in the future, the holding company shall grant Wei Qiao textile an option to sell the seventh thermal power plant.

Wei Qiao textile has the right to evaluate the valuation of an independent third party valuer, requiring the holding company to buy all or part of the seventh thermal power plants.

Net profit 11 million 900 thousand

According to the reporter, the Wei Qiao textile is located in 4 power plants located in Wei Qiao town and Zouping Economic Development Zone, including Wei Qiao second and third thermal power plants, and the first and second thermal power plants in Zouping, with installed capacity of 180, 420, 210 and 480 MW respectively.

Wei Qiao textile announced that in August 31st this year, the book value of Wei Qiao thermal power plant in Wei Qiao textile account book was about 3 billion 751 million yuan.

It is expected that after deducting the relevant tax, the proceeds from the sale of the asset will amount to about 17 million 783 thousand yuan.

The expected sale will bring about a net profit of about 11 million 900 thousand yuan.

Wei Qiao textile said it expects that the power and steam produced by the Wei Qiao thermal power plant will be used for the production and operation of the holding company after the sale items are completed.

This is not the first time that Wei Qiao textile has sold thermoelectric assets.

As early as June 2012, it issued a notice that it sold the thermoelectric assets and land use rights located in Binzhou Economic Development Zone to Binzhou Zhonghai investment and Business Co., Ltd. at the cost of 698 million 500 thousand yuan.

Wei Qiao textile said at that time that after the pfer was completed, the company still had 1410 megawatts installed capacity generating units.

The ups and downs of the Binzhou thermal power plant, which is the above-mentioned power plant, has also been the focus of public attention.

In July 2012, the Binzhou thermal power plant, which has been in existence for nearly 10 years, was closed by the local government on the basis of "energy conservation and emission reduction".

For the reasons for the shutdown, the local said that after the shutdown of the thermal power plant, it is estimated that sulfur dioxide emissions will be reduced by 6226 tons / year, and nitrogen oxides will be reduced by 2849 tons / year.

It is worth mentioning that the Binzhou thermal power plant also once boarded the "blacklist".

Just a year ago, according to the notice on the implementation of the plan to eliminate backward production capacity, Shandong Province announced the list of the first batch of shut down enterprises in the power industry in 2013, including the Wei Qiao Binzhou thermal power plant.