JavaScript is off. Please enable to view full site.

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

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

Sunday, November 19, 2023, 08:48 GMT+7
AES in talks to sell major coal-fired power plant in Vietnam: sources
A file photo shows the logo of the multinational electric power company AES at an office in Santiago, Chile June 4, 2019. Photo: Reuters

HANOI/PRAGUE/SEOUL -- U.S. energy firm AES Corp. 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, told Reuters it was also considering selling its 30-percent 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, 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-percent 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-percent 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-percent 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 November 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.



Read more




‘Taste of Australia’ gala dinner held in Ho Chi Minh City after 2-year hiatus

Taste of Australia Gala Reception has returned to the Park Hyatt Hotel in Ho Chi Minh City's District 1 after a two-year hiatus due to the COVID-19 pandemic

Vietnamese woman gives unconditional love to hundreds of adopted children

Despite her own immense hardship, she has taken in and cared for hundreds of orphans over the past three decades.

Latest news