Shenhua Group Corp. Ltd. and China Guodian Corp. have submitted a merger plan between the two state-owned majors to the country's State Council, Chinese news agency Jiemian reported Aug. 2, citing a speech given by Guan Weizhu, head of safety production at China Guodian, at an alternative energy conference.
Guan said that the new group will be tentatively named National Energy Investment Group, with total assets estimated at over 1.8 trillion yuan and a debt ratio of more than 60%.
There has been market speculation over the merger for the past month and the listed units of both companies previously confirmed that the two parent groups were discussing a transaction but neither named the other company. Guan's comments came as the first confirmation from either company.
Shenhua Group is the parent of Hong Kong- and Shanghai-listed China Shenhua Energy Co. Ltd.
As of Aug. 2, US$1 was equivalent to 6.72 Chinese yuan.