Power companies in the red

China's power industry has again reported losses in February, an official said at a meeting held Saturday, Monday's China Securities Journal reported.

Liu Nanchang, director of the Bureau of General Affairs with State-owned Assets Supervision and Administration Commission (SASAC), warned that most central enterprises in the power industry have a debt ratio of over 80 percent.

He pointed out that the risk of high debt ratio has increased for the power industry. For a long time the industry's profitability remained low as the pricing system for coal was immature and large amounts were borrowed from banks to meet increasing power demands.

There are more than 10 central enterprises running directly under the administration of SASAC, including two major grids and five major power groups, all of them ranking high on the debt ratio list.

Central enterprises account for over 90 percent of the power grid assets and over 50 percent of the power generation assets.
 

Source: Biz China