Mirant’s liquidity position heading into 2003 was significantly strengthened after the Atlanta-based company on Tuesday said that it has completed the sale of the company’s 33% economic interest in the Shajiao C power plant in China to China Resources Power Holding Co. Ltd. for $300 million.

Proceeds from the sale increased Mirant’s liquidity to $1.4 billion and allowed Mirant to eliminate a $254 million loan at its Asian holding company. Mirant on Dec. 20 said that the elimination of this loan would remove a previously disclosed dividend block from Mirant’s Asian business.

“The sale of Shajiao C allows Mirant to maintain a solid level of liquidity as we end the year,” said Rick Kuester, senior vice president at Mirant. “Eliminating the debt of our Asian holding company allows Mirant to remove the Asian dividend block, a significant development considering the size and profitability of our operations in the Philippines.”

Shajiao C is a 1,960 MW power plant located near Hong Kong and is the largest coal-fired plant in Guangdong Province. Mirant originally purchased a 32% economic interest in Shajiao C as part of the company’s acquisition of Consolidated Electric Power Asia in 1997. Mirant purchased an additional 1% interest in 2001 when it acquired Laito Company Limited, a minority shareholder in the project.

Following the sale of Mirant’s interest in Shajiao C, the company’s remaining Asian assets are its seven power plants in the Philippines and one power plant on Guam. ING Bank N.V. advised Mirant on the transaction.

Mirant first disclosed the sale of its interest in Shajiao C as part of its reporting of earnings results for the most recent third quarter (see Power Market Today, Dec. 24). The company fell short of Wall Street expectations in the third quarter, reporting adjusted earnings of $149 million, or 33 cents per diluted share, compared to average analysts’ expectations of 47 cents/share.

As with several of its competitors in the power sector, Mirant has been making a full court press to unload assets in order to shore up its liquidity. FERC in October gave its blessing to a proposal allowing Alliant Energy Resources Inc. to acquire Mirant’s 309 MW natural gas-fired power plant in Neenah, WI, for $109 million (see Power Market Today, Oct. 10).

In November, Mirant entered an agreement to sell the assets of Mirant Americas Production Co. for $150 million. The sale of these assets was completed in December. Mirant Americas Production is an oil and gas exploration, development and production company reported in Mirant’s North America Group operations.

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