China's National Council for Social Security Fund (SSF) on Thursday announced that it will buy 2 billion yuan (318 million U.S. dollars) in stocks from GD Power Development Co.
Securities authorities on Wednesday approved a 4-billion-yuan fundraising proposal submitted by GD Power, a listed branch of China Guodian Corporation, one of the country's five power giants, according to the SSF.
According to the proposal, the SSF and China Guodian Corporation will both pay cash for 2 billion yuan worth of stocks through a targeted issuance, the SSF said.
The purchase will enable the SSF to own 917 million shares, or a 5.32-percent stake, in GD Power upon completion, making it the company's second-largest shareholder, it said.
The purchase marked the first time for the SSF to directly invest in a listed firm in the country's basic industries. The SSF will hold the shares for three years.
"After careful study and analysis, we believe that GD Power is worth investing...the investment will contribute to both bolstering the company's capital and hedging the value of the SSF's assets," said the SSF.
According to a GD Power plan, the company aims to boost its installed power generation capacity to 60 million kilowatts by 2015 from the current 33 million kilowatts.
Founded in 2000, the SSF is designed to serve as a solution to the country's aging problem and act as a strategic reserve to support future social security expenditures.
Copyright ©1999-2011 Chinanews.com. All rights reserved.
Reproduction in whole or in part without permission is prohibited.
