Connected & Discloseable Transaction

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited takeno responsibility for the contents of this announcement, make no representation as toits accuracy or completeness and expressly disclaim any liability whatsoever for anyloss howsoever arising from or in reliance upon the whole or any part of the contents ofthis announcement. DATANG INTERNATIONAL POWER GENERATION CO., LTD. (a sino-foreign joint stock limited company incorporated in the People's Republic of China) (Stock Code: 00991) ANNOUNCEMENT CONNECTED AND DISCLOSEABLE TRANSACTION CAPITAL CONTRIBUTION AGREEMENTOn 16 June 2014, the Company entered into the Capital Contribution Agreement with CDC,Huayin Electric Power and Leizhou Peicai Construction Company, pursuant to which theparties agreed to make capital contribution to establish Leizhou Power Generation Companyin order to construct the Leizhou Coal-fired Project (two 1,000MW coal-fired generatingunits). The total investment of the Leizhou Power Generation Company project amounted toRMB9,934,170,000 and the project capital amounted to RMB1,986,834,000. The proportionand amount of capital contribution to be made by each party were as follow: The Companyagreed to contribute a sum of RMB675,523,600, which accounts for 34% of the equityinterest of Leizhou Power Generation Company. Huayin Electric Power agreed to contributea sum of RMB655,655,200, which accounts for 33% of the equity interest of Leizhou PowerGeneration Company. CDC agreed to contribute a sum of RMB596,050,200, which accounts for30% of the equity interest of Leizhou Power Generation Company. Leizhou PeicaiConstruction Company agreed to contribute a sum of RMB59,605,000, which accounts for3% of the equity interest of Leizhou Power Generation Company. LISTING RULES IMPLICATIONSAs one or more of the applicable percentage ratios (as defined under Rule 14.07 of theListing Rules) in respect of the transaction under the Capital Contribution Agreementis more than 5% and all the applicable percentage ratios are less than 25%, the CapitalContribution Agreement and the transaction contemplated thereunder constitutes adiscloseable transaction of the Company and is subject to the reporting and announcementrequirements under Chapter 14 of the Listing Rules. As at the date of this announcement, CDC is the controlling Shareholder of the Company,which together with its subsidiaries hold 34.71% of the issued share capital of theCompany. Huayin Electric Power is a subsidiary of CDC. Accordingly, CDC and HuayinElectric Power are connected persons of the Company. The entering into of the CapitalContribution Agreement and the transaction contemplated thereunder constitute a connectedtransaction of the Company. As one or more of the applicable percentage ratios (as defined under Rule 14.07 of theListing Rules) in respect of the transaction under the Capital Contribution Agreementis more than 5%, the Capital Contribution Agreement and the transaction contemplatedthereunder is subject to the reporting and announcement requirements as well as theapproval by the independent Shareholders of the Company under Chapter 14A of the ListingRules. The Company will disclose the relevant details of the transaction under the CapitalContribution Agreement in the next annual report and accounts of the Company inaccordance with the relevant requirements as set out in Chapter 14A of the ListingRules. A circular containing details of the Capital Contribution Agreement, a letterfrom the independent board committee and a letter from the independent financialadvisor of the Company, both advising the terms of the Capital Contribution Agreement,is expected to be despatched to the Shareholders on or before 8 July 2014. CAPITAL CONTRIBUTION AGREEMENT Date 16 June 2014 Parties 1. The Company; 2. Huayin Electric Power; 3. CDC; and 4. Leizhou Peicai Construction Company. Major Terms of the Agreement 1. The parties agreed to make capital contribution to establish Leizhou Power Generation Company in order to construct the Leizhou Coal-fired Project (two 1,000MW coal-fired generating units). The total investment of the Leizhou Power Generation Company project amounted to RMB9,934,170,000 and the project capital amounted to RMB1,986,834,000, representing 20% of the total investment. The proportion and amount of capital contribution to be made by each party were as follow: The Company agreed to contribute a sum of RMB675,523,600, which accounts for 34% of the equity interest of Leizhou Power Generation Company. Huayin Electric Power agreed to contribute a sum of RMB655,655,200, which accounts for 33% of the equity interest of Leizhou Power Generation Company. CDC agreed to contribute a sum of RMB596,050,200, which accounts for 30% of the equity interest of Leizhou Power Generation Company. Leizhou Peicai Construction Company agreed to contribute a sum of RMB59,605,000, which accounts for 3% of the equity interest of Leizhou Power Generation Company. The capital will be injected by the parties depending on the construction progress of the project. 2. The initial registered capital of Leizhou Power Generation Company is RMB100 million and will be contributed by the parties in cash on an one-off basis. The proportion and the amount of capital contribution to be made by each party was as follows: The Company agreed to make capital contribution in the sum of RMB34,000,000, which accounts for 34% of the registered capital. Huayin Electric Power agreed to make capital contribution in the sum of RMB33,000,000, which accounts for 33% of the registered capital. CDC agreed to make capital contribution in the sum of RMB30,000,000, which accounts for 30% of the registered capital. Leizhou Peicai Construction Company agreed to make capital contribution in the sum of RMB3,000,000, which accounts for 3% of the registered capital. 3. The differences between the total investment and the project capital will be supplemented by way of project financing. If necessary, the parties shall provide guarantee for the abovementioned financing facility in proportion to their respective contribution to the registered capital of Leizhou Power Generation Company. 4. The scope of business of Leizhou Power Generation Company mainly includes the construction and operation of power plants, the sale of electricity and thermal power, the repair and maintenance of power equipment and power related technical services, the integrated utilization and sale of by-products such as pulverized fuel ash and desulfurized plaster (subject to the scope of business set out in the Business License for the Enterprise Legal Person to be issued by the administration for industry and commerce). Conditions for the Capital Contribution Agreement becoming effective The agreement shall become effective when it is duly signed by the legal representativesor authorized agent of the parties with their respective company seals affixed thereon,and is approved by the respective board of directors or general meeting of the parties. REASONS FOR AND BENEFITS OF ENTERING INTO THE CAPITAL CONTRIBUTION AGREEMENT The joint capital contributions of the Company, CDC, Huayin Electric Power and LeizhouPeicai Construction Company to establish Leizhou Power Generation Company in order toconstruct the Leizhou Coal-fired Project is in compliance with the Company's strategy toconsolidate the leading position of its principal power generation business, which will bebeneficial for the expansion of the Company's power source scale, optimisation of theCompany's asset quality, thereby facilitating the sustainable development of the Company. Leizhou Power Generation Company will become a subsidiary of the Company and its financialstatements will be consolidated into the financial statements of the Company. The Directors (excluding the independent non-executive Directors whose views will becontained in the circular after considering the advice from the independent financialadvisor) are of the view that the relevant terms of the Capital Contribution Agreementare fair and reasonable, have been entered into after arm's length negotiation betweenall parties thereto and determined on normal commercial terms, and are in the interestsof the Company and its Shareholders as a whole. INFORMATION OF THE RELEVANT PARTIES OF THE AGREEMENT 1. The Company is principally engaged in the construction and operation of power plants, the sale of electricity and thermal power, the repair and maintenance of power equipment and power related technical services, with its main service areas being in the PRC. 2. CDC was established on 9 March 2003 with a registered capital of RMB18.009 billion. It is principally engaged in the development, investment, construction, operation and management of power energy, organization of power (thermal) production and sales; manufacturing, repair and maintenance of power equipment; power technology development and consultation; power engineering, contracting and consultation of environmental power engineering; development of new energy as well as development and production of power related coal resources. 3. Huayin Electric Power was established on 22 March 1993 with a registered capital of RMB712 million. It is principally engaged in power production business and CDC holds 33.34% of its equity. 4. Leizhou Peicai Construction Company was established on 13 December 2012 with a registered capital of RMB50 million. It is principally engaged in land development & consolidation, road construction, building construction, urban infrastructure construction, financing, project supervision and other businesses. LISTING RULES IMPLICATIONS As one or more of the applicable percentage ratios (as defined under Rule 14.07 of theListing Rules) in respect of the transaction under the Capital Contribution Agreement ismore than 5% and all the applicable percentage ratios are less than 25%, the CapitalContribution Agreement and the transaction contemplated thereunder constitutes a discloseabletransaction of the Company and is subject to the reporting and announcement requirementsunder Chapter 14 of the Listing Rules. As at the date of this announcement, CDC is the controlling Shareholder of the Company,which together with its subsidiaries hold 34.71% of the issued share capital of theCompany. Huayin Electric Power is a subsidiary of CDC. Accordingly, CDC and Huayin ElectricPower are connected persons of the Company. The entering into of the Capital ContributionAgreement and the transaction contemplated thereunder constitute a connected transactionof the Company. As one or more of the applicable percentage ratios (as defined under Rule 14.07 of theListing Rules) in respect of the transaction under the Capital Contribution Agreement ismore than 5%, the Capital Contribution Agreement and the transaction contemplated thereunderis subject to the reporting and announcement requirements as well as the approval by theindependent Shareholders of the Company under Chapter 14A of the Listing Rules. The Company will disclose the relevant details of the transaction under the Capital ContributionAgreement in the next annual report and accounts of the Company in accordance with therelevant requirements as set out in Chapter 14A of the Listing Rules. A circular containingdetails of the Capital Contribution Agreement, a letter from the independent board committeeand a letter from the independent financial advisor of the Company, both advising the termsof the Capital Contribution Agreement, is expected to be despatched to the Shareholders onor before 8 July 2014. None of the Directors has material interests in the Capital Contribution Agreement. Thoseconnected Directors, including Chen Jinhang, Hu Shengmu and Fang Qinghai, who are currentor former principal management staff of CDC, have abstained from voting at the Board meetingfor approval of the relevant transaction in accordance with the requirements of the ListingRules of the Shanghai Stock Exchange. INDEPENDENT BOARD COMMITTEE AND INDEPENDENT FINANCIAL ADVISOR An independent board committee comprising the independent non-executive Directors will beformed to advise the independent shareholders on the terms of the Capital ContributionAgreement. The Company will appoint an independent financial advisor to advise theindependent board committee of the Company and the independent shareholders on theterms of the Capital Contribution Agreement. DEFINITIONS In this announcement, unless the context otherwise requires, the following expressionshave the following meanings: "Board" the board of Directors "Capital Contribution Agreement" the capital contribution agreement entered into between the Company, CDC, Huayin Electric Power and Leizhou Peicai Construction Company on 16 June 2014 in relation to the capital contribution for the establishment of Leizhou Power Generation Company "CDC" China Datang Corporation, a State-owned enterprise established under the laws of the PRC and is the controlling Shareholder of the Company which, together with its subsidiaries, own approximately 34.71% of the issued share capital of the Company as at the date of this announcement "Company" Datang International Power Generation Co., Ltd., a sino-foreign joint stock limited company incorporated in the PRC on 13 December 1994, whose H Shares are listed on the Stock Exchange and the London Stock Exchange and whose A Shares are listed on the Shanghai Stock Exchange "connected person" has the meaning ascribed to it under the Listing Rules "connected transaction" has the meaning ascribed to it under the Listing Rules "Directors" the director(s) of the Company "Huayin Electric Power" Datang Huayin Electric Power Co., Ltd., details of which are set out in the section entitled "Information of the Relevant Parties of the Agreement" "Leizhou Peicai Construction Leizhou City Peicai Infrastructure Construction Co., Ltd.,Company" details of which are set out in the section entitled "Information of the Relevant Parties of the Agreement" "Leizhou Power Generation Company" Guangdong Datang International Leizhou Power Generation Co., Ltd., which is to be jointly established and whose capital contribution is to be made by the Company, CDC, Huayin Electric Power and Leizhou Peicai Construction Company, in order to construct the Leizhou Coal-fired project "Leizhou Coal-fired Project" The coal-fired project, which capital is jointly contributed by the Company, CDC, Huayin Electric Power and Leizhou Peicai Construction Company, and is located at the Wushi Town, Beibu Gulf, the western coast of Leizhou Peninsula, Zhanjiang. Phase 1 of the construction is planned to consist of 2�1,000MW ultra-supercritical coal-fired steam turbine generating units, and the planned capacity is 6�1,000MW "Listing Rules" the Rules Governing the Listing of Securities on the Stock Exchange "PRC" the People's Republic of China "RMB" Renminbi, the lawful currency of the PRC "Stock Exchange" The Stock Exchange of Hong Kong Limited "%" percent By Order of the Board Zhou Gang Secretary to the Board Beijing, the PRC, 16 June 2014 As at the date of this announcement, the Directors of the Company are: Chen Jinhang, Hu Shengmu, Wu Jing, Fang Qinghai, Zhou Gang,Li Gengsheng, Cao Xin, Cai Shuwen, Liu Haixia, Guan Tiangang,Dong Heyi*, Ye Yansheng*, Li Hengyuan*, Zhao Jie*, Jiang Guohua* * Independent non-executive Directors