November 24 -- Power generation company Henan Yuneng Holdings (001896.SZ) will sell a 50 percent stake in Zhengzhou Xinli Power to its parent, Henan Investment Group, for 281 million yuan, reports yicai.com, citing a company filing.

Xinli Power is one of the major power producers based in Zhengzhou, Henan province. It has five 200-MV coal-fired power generation heat supply units, supplying power and heat to industrial and residential users.

The target company had been mired in losses since 2008 due mainly to rising coal prices.

Henan Yuneng had recorded respective losses of 157 million yuan, 20.15 million yuan and 58.16 million yuan from its investment in Xinli Power during the 2008-2010 period.

In the first half of 2011, the company's investment loss hit 67.56 million yuan.

Should the proposed transaction succeed, Henan Investment Group will cash in investment returns of 80 million yuan.