Exxon to sell power utility in Hong Kong for $3.4 billion
HONG KONG - Reuters
Exxon Mobil will sell its majority stakes in a Hong Kong production unit. REUTERS photoUS oil giant ExxonMobil said Tuesday it had agreed to sell its stake in a Hong Kong power-generation firm, in a deal worth more than $3 billion.
The largest US oil company reported an 18 percent decline in third quarter profits last month due to weaker refining earnings.
"ExxonMobil Energy Limited has reached an agreement to divest its 60 percent shareholding in Castle Peak Power Company Limited (CAPCO) to CLP Power and China Southern Power Grid (CSG)," a spokeswoman told AFP.
Over the last year, ExxonMobil shares have underperformed the broader market amid criticism that it is spending too much on costly projects while production has sagged.
"Our company routinely assesses our global portfolio and then looks for opportunity for growth, restructuring or divestment so as to meet our global strategic objective," the ExxonMobil spokeswoman said.
Hong Kong's CLP Holdings and China's state-run CSG confirmed they had acquired the 60 percent stake on Tuesday.
A statement from CLP said the two firms would "each acquire half of the 60 percent interest" in the company, which has three power stations in Hong Kong. CLP said it would pay HK$12 billion ($1.55 billion) for its share of the stake while CSG did not disclose its figures.
The acquisition will raise CLP's stake in the company to 70 percent, while the remaining 30 percent will be held by CSG.
CLP also announced that it had agreed to buy ExxonMobil's 51 percent stake in Hong Kong Pumped Storage Development Company for a total of HK$2 billion.