26th Apr 2006 07:00
Datang Intl Power Generation Co Ld26 April 2006 The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this announcement, makes norepresentation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any losshowsoever arising from or in reliance upon the whole or any part of the contents of this announcement. Datang International Power Generation Co., Ltd. (a sino-foreign joint stock limited company incorporated in the People's Republic of China) (Stock Code: 991) CONNECTED TRANSACTION ENTRUSTED LOAN AGREEMENT The Board announces that on 20 April 2006, the Company entered into the Entrusted Loan Agreement with Bank of China andDatang Shentou, a non wholly-owned subsidiary of the Company, in relation to loan facilities of a principal amount ofUS$50,000,000 (equivalent to approximately HK$387,500,000) granted by the Company to Datang Shentou through theEntrusted Loan Arrangement. CONNECTED TRANSACTION As at the date of the Entrusted Loan Agreement, Tianjin Jinneng, a holder of approximately 10.84% of the issued sharecapital of the Company, held 40% of the equity interest in Datang Shentou. Therefore, Datang Shentou is a connectedperson of the Company under the Listing Rules and the Entrusted Loan Arrangement constitutes financial assistance bythe Company to Datang Shentou under Rule 14A.13(2)(a)(i) of the Listing Rules. As each of the assets ratio, the revenueratio and the consideration ratio (as all defined in Rule 14.07 of the Listing Rules) for the principal amount of theloan facilities under the Entrusted Loan Agreement is less than 2.5% and the Entrusted Loan Arrangement is on normalcommercial terms, the Entrusted Loan Agreement is only subject to the reporting and announcement requirements but isexempt from the approval of the independent shareholders under Rules 14A.66(2)(a) under the Listing Rules. ENTRUSTED LOAN AGREEMENT Date 20 April 2006 Parties (1) the Company, as the lender;(2) Bank of China, as the lending agent; and(3) Datang Shentou, as borrower. Major terms of the Entrusted Loan Agreement Entrusted Loan Arrangement Pursuant to the Entrusted Loan Agreement, the Company instructed Bank of China to act as a lending agent to, interalia, release the Entrusted Loan, which is funded by the Company, to Datang Shentou and monitor the use and repaymentof the Entrusted Loan by Datang Shentou. Amount of the principal of the Entrusted Loan US$50,000,000 (equivalent to approximately HK$387,500,000) Term 96 months, from the date as agreed by the Company and Datang Shentou of utilising the Entrusted Loan which is expectedto be made before the end of May 2006 Interest rate LIBOR (6 months in US$) as quoted by Telerate Service Page 3750 at 11:00 a.m. on the date which is two working daysprior to each Interest Period plus 1% per annum, calculated on the basis of 360 days a year. Repayment schedule of the principal of the Entrusted Loan US$2,000,000 for every six months from 21 September 2006 to 21 March 2010 due and payable on the first day of eachinterval; US$4,000,000 due and payable on 21 September 2010 and US$5,000,000 for every six months from 21 March 2011 to21 September 2013 due and payable on the first day of each interval. Payment schedule of the interest of the Entrusted Loan Semi-annually on 21 June and 21 December each year with last payment on 21 September 2013 (i.e. the date of repaymentof last instalment of principal of the Entrusted Loan) Handling charge The Company shall pay a handling charge of 0.1% per annum of the outstanding principal of the Entrusted Loan to Bank ofChina which is due and payable semi-annually on 21 June and 21 September of each year so long as any part of theEntrusted Loan is outstanding. Conditions precedent The Entrusted Loan Agreement shall become effective upon the signing and stamping of the same by the parties theretoand being approved by the relevant authorities in the PRC. As at the date of this announcement, all such approval havebeen obtained. CONNECTED TRANSACTION As at the date of the Entrusted Loan Agreement, Tianjin Jinneng Investment Company ("Tianjin Jinneng") a holder ofapproximately 10.84% of the issued share capital of the Company, held 40% of the equity interest in Datang Shentou.Therefore, Datang Shentou is a connected person of the Company under the Listing Rules and the Entrusted LoanArrangement constitutes financial assistance by the Company to Datang Shentou under Rule 14A.13(2)(a)(i) of the ListingRules. As each of the assets ratio, the revenue ratio and the consideration ratio (as all defined in Rule 14.07 of theListing Rules) for the principal amount of the loan facilities under the Entrusted Loan Agreement is less than 2.5% andthe Entrusted Loan Arrangement is on normal commercial terms, the Entrusted Loan Agreement is only subject to thereporting and announcement requirements but is exempt from the approval of the independent shareholders under Rules14A.66(2)(a) under the Listing Rules. REASONS FOR AND BENEFITS OF ENTERING INTO THE ENTRUSTED LOAN AGREEMENT As disclosed in the announcement of the Company dated 3 September 2003, the proceeds from the issue of convertiblebonds with principal amount of approximately US$153.8 million (bearing interest at the rate 0.75% per annum), which wascompleted on 9 September 2003, are expected to be used to finance the Company's foreign exchange requirements, inparticular, for funding the purchase of imported equipment for use in power generation plants and refinancing part ofthe Company's foreign exchange borrowings. The Entrusted Loan Arrangement represents the effort of the Company to lowerthe financial cost of the Group by funding the loan facilities to Datang Shentou in place of the existing loanfacilities provided by the banks which had been utilized for the purchase of imported equipment for use in powergeneration. The Directors (including the independent non-executive Directors) believe that the Entrusted Loan Agreementare entered into on normal commercial terms which are fair and reasonable and are in the interests of the Company andits shareholders as a whole. INFORMATION OF THE GROUP The Group is principally engaged in the development and operation of power plants, the sale of electricity and thermalpower, and the repair, testing and maintenance of power equipment and power related technical services, with itspresent main operation in the PRC. INFORMATION OF DATANG SHENTOU Datang Shentou was incorporated in the PRC on 8 December 1998 as a limited liability company and is principally engagedin power generation business. As at the date of this announcement, Datang Shentou was owned as to 60% by the Companyand 40% by Tianjin Jinneng. DEFINITIONS "Bank of China" head office of Bank of China "Board" the board of Directors "Company" Datang International Power Generation Co., Ltd. ("Chinese Characters"), a sino-foreign joint stock limited company incorporated in the PRC on 13 December 1994, the H shares of which are listed on the Stock Exchange and the London Stock Exchange "connected person" has the meaning ascribed to it under the Listing Rules "Datang Shentou" Shanxi Datang International Shentou Power Generation Company Limited ("Chinese Characters") a limited liability company incorporated in the PRC on 8 December 1998, principally engaged in power generation business "Director(s)" the director(s) of the Company "Entrusted Loan" loan facilities with a principal amount of US$50,000,000 "Entrusted Loan Agreement" the entrusted loan agreement dated 20 April 2006 entered into between the Company, Bank of China and Datang Shentou in respect of the Entrusted Loan Arrangement "Entrusted Loan Arrangement" the Company instructing Bank of China to act as a lending agent to, inter alia, release the Entrusted Loan, which is funded by the Company, to Datang Shentou and monitor the use and repayment of the Entrusted Loan by Datang Shentou pursuant to the Entrusted Loan Agreement "Group" the Company and its subsidiaries from time to time "Interest Period" the period commencing on the date of Datang Shentou utilising the Entrusted Loan; and thereafter on each of the dates when the change of the interest rate of the Entrusted Loan becomes effective "LIBOR" London Inter Bank Offering Rate "Listing Rules" Rules Governing the Listing of Securities on the Stock Exchange "London Stock Exchange" The London Stock Exchange Limited "PRC" the People's Republic of China "RMB" Renminbi, the lawful currency of the PRC "Stock Exchange" The Stock Exchange of Hong Kong Limited "US$" United States dollars, the lawful currency of the United States of America "%" per cent. By order of the Board Datang International Power Generation Co., Ltd. Zhai Ruoyu Chairman Beijing, the PRC, 25 April 2006 As at the date of this announcement, the Directors are: Zhai Ruoyu, Zhang Yi, Hu Shengmu, Fang Qinghai, Yang Hongming, Liu Haixia, Guan Tiangang, Su Tiegang, Ye Yonghui, Tong Yunshang, Xie Songlin*, Xu Daping*, Liu Chaoan*, Yu Changchun* and Xia Qing* * independent non-executive Directors For the purpose of this announcement, US$1.00 is equivalent to HK$7.75. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Datang Intl H