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China could save EU by buying out it? [Copy link] 中文

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Post time 2011-12-23 09:58:37 |Display all floors
China is bidding for the quality assets in EU, maybe this is a good way to save EU from the debt plights.
here is an article from FT
Three Gorges outbids rivals for stake in EDP

Three Gorges Corporation has won a bidding contest to buy a stake in Energias de Portugal, the country’s dominant power company, for €2.7bn in a deal that is seen as a forerunner of other potential asset sales to China by debt-stricken eurozone economies.

Three Gorges defeated rival bids from Eon, Germany’s largest utility, Eletrobras, Brazil’s state-controlled power company, and Cemig, another Brazilian contender.
In a statement to Lisbon’s stock market authority, Portugal’s state holding company said Three Gorges would pay €2.69bn for 21.35 per cent of EDP, becoming the utility’s largest single shareholder.
The Chinese group will pay €3.45 a share, representing a premium of 53 per cent over Wednesday’s closing price. EDP shares rose more than 4 per cent to €2.33 yesterday ahead of the announcement.

The Portuguese government said Three Gorges would also invest up to €2bn to acquire minority stakes in Portuguese wind farms and extend €4bn in credit lines to EDP.
The sale of Lisbon’s last remaining stake in EDP, a former state monopoly, is one of the first eurozone privatisations to go ahead in the wake of the region’s sovereign debt crisis.
Under the terms of a €78bn bail-out agreement with the European Union and International Monetary Fund, Lisbon has agreed on an extensive privatisation programme that will also include the national grid operator and state airline.
Forceful lobbying by the contenders, including support for Eon’s bid by Angela Merkel, German chancellor, has made the sale a contentious political issue in Portugal, with opposition parties insisting on a demonstrably impartial decision.
The sale was a blow to Eon, which had hoped to gain a foothold in the fast-growing Brazilian market, where EDP has extensive operations.
Johannes Teyssen, Eon chief executive, said his offer, which included moving the headquarters of some of Eon’s renewables business to Portugal, “would have been good for Eon and EDP”. But the German company had not been able to offer more “than what we can justify as an appropriate . . . investment.”
Bankers said EDP would need approximately €2.6bn a year over the next three years to service a total debt of about €10.8bn.
Portugal’s Banco BPI said Three Gorges was seen as having made “the best offer in terms of independence for EDP’s strategy and the deleveraging of its balance sheet”.
Lisbon analysts said Eon was understood to have bid €3.25 a share.

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Post time 2011-12-23 13:20:18 |Display all floors
China looks to win-win situations. Europe should be assured.

On the other hand, I think the billionairess and general public in Europe can help a lot.

The fat guy loved by the Sinophobic West.

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Post time 2011-12-23 20:50:38 |Display all floors
This post was edited by markwu at 2011-12-23 20:51

I have been wondering for a number of years whether China has been overpaying for the inflated premiums on the equity prices of foreign assets in the same way she has been cornered to overpay the inflated prices of foreign commodities while underestimating the strategic but risk-adjusted advantage of multiplying the value of her financial holdings beyond just keeping them in the banks or under pillows besides the other big problem of getting less in renminbi for the weakened dollar when she calls in the dollar-denominated treasuries on maturity.

The contents of this paragraph alone have darkened my face permanently.

Sigh (not that i will personally gain anything even for thinking about this  - i just hate it when China loses).

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Post time 2011-12-26 11:11:35 |Display all floors
indeed, China face a dilemma here, on one side, China has tremendous assets in-dollar with low benefits and on the other, China is also worried the risks which she may face with less financial experiences especially comparing those western moentary crocodiles.

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