8th Nov 2012 07:00
Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever 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: 00991) ANNOUNCEMENT CONTINUING CONNECTED TRANSACTIONS
CONTINUING CONNECTED TRANSACTIONS
In 2012, certain subsidiaries of the Company entered into the CCT Agreements with certain subsidiaries of CDC to carry out the following day-to-day continuing connected transactions:
Purchase of coal from certain subsidiaries of CDC by certain subsidiaries of the Company
1. On 6 November 2012, each of such certain power plants of the Company in
Shanxi entered into the Shanxi Purchase and Sale of Coal Agreements with Datang Fuel Co., a wholly-owned subsidiary of CDC, pursuant to which, each of such certain power plants of the Company in Shanxi agreed to purchase coal for production from Datang Fuel Co., with a maximum aggregate annual transaction amount of approximately RMB126 million during the term commencing from 1 January 2012 to 31 December 2012.
2. On 6 November 2012, Yuncheng Power Generation Company, a subsidiary of the
Company, entered into the Yuncheng Purchase and Sale of Coal Agreement with Shaanxi Fuel Company, an indirect controlled subsidiary of CDC, pursuant to which Yuncheng Power Generation Company agreed to purchase coal for production from Shaanxi Fuel Company, with a maximum aggregate annual transaction amount of approximately RMB11 million during the term commencing from 1 January 2012 to 31 December 2012.
3. On 6 November 2012, Liancheng Power Generation Company, a subsidiary of the
Company, entered into the Liancheng Purchase and Sale of Coal Agreement
with Gansu Fuel Co., an indirect controlled subsidiary of CDC, pursuant to
which, Liancheng Power Generation Company agreed to purchase coal for
production from Gansu Fuel Co., with a maximum aggregate annual transaction
amount of approximately RMB166 million during the term commencing from 1
April 2012 to 31 December 2012.
It is estimated that the aggregate annual transaction cap of the above three continuing connected transactions for the year ended 31 December 2012 will be approximately RMB303 million.
Sale of coal to a subsidiary of CDC by a subsidiary of the Company
On 6 November 2012, Inner Mongolia Fuel Co., a wholly-owned subsidiary of Beijing Datang Fuel Company Limited, a subsidiary of the Company, entered into the Inner Mongolia Purchase and Sale of Coal Agreement with Datang Fuel Co., a wholly-owned subsidiary of CDC, pursuant to which, Inner Mongolia Fuel Co. agreed to supply coal to Datang Fuel Co., with a maximum aggregate annual transaction amount of approximately RMB300 million during the term commencing from 1 October 2012 to 31 December 2012.
LISTING RULES IMPLICATIONS
As at the date of this announcement, CDC is the controlling shareholder of the Company, which together with its subsidiaries hold approximately 34.71% of the issued share capital of the Company. Datang Fuel Co., Shaanxi Fuel Company and Gansu Fuel Co. are subsidiaries of CDC and are connected persons of the Company. The transactions contemplated under the CCT Agreements constitute continuing connected transactions of the Company.
Since each of the applicable percentage ratios (as defined under Rule14.07of the Listing Rules) in respect of (i) the aggregated transaction amount for purchases of coal under the Shanxi Purchase and Sale of Coal Agreements, the Yuncheng Purchase and Sale of Coal Agreement and the Liancheng Purchase and Sale of Coal Agreement; and (ii) the transaction amount for sales of coal under the Inner Mongolia Purchase and Sale of Coal Agreement are higher than 0.1% but lower than 5%, each of the CCT Agreements and the transactions contemplated thereunder are subject to the reporting and announcement requirements, but are exempt from the approval by the independent shareholders of the Company under the requirements of Chapter 14A of the Listing Rules.
PURCHASE OF COAL FROM CERTAIN SUBSIDIARIES OF CDC BY CERTAIN SUBSIDIARIES OF THE COMPANY
1. Shanxi Purchase and Sale of Coal Agreements
Date: 6 November 2012
Parties: Certain power plants of the Company in Shanxi and Datang Fuel Co.
Major terms:
Certain power plants of the Company in Shanxi entered into four Shanxi Purchase and Sale of Coal Agreements with Datang Fuel Co., and the terms of which are materially the same, the major terms of which are as follows:
(1)Subject matter: Certain power plants of the Company in Shanxi owned by the
Company agreed to purchase coal from Datang Fuel Co. during the term of
validity of the agreement.
The parties may, from time to time during the term of validity of the agreement, enter into specific purchase and sales contracts in respect of the purchase of coal by certain power plants of the Company in Shanxi provided that such specific purchase and sales contracts shall be subject to the terms of the Shanxi Purchase and Sale of Coal Agreements.
(2)Consideration: To be determined in the ordinary course of business on
normal commercial terms on the basis of arm's length negotiation according
to prevailing market conditions.
(3)Settlement and payment: Settlement shall be made by the relevant parties in
accordance with the confirmed settlement invoice.
(4)Term: One year, commencing from 1 January 2012 to 31 December 2012.
The Company confirms that each of the applicable percentage ratios (as defined under Rule 14.07 of the Listing Rules) in respect of the transaction amounts under the Shanxi Purchase and Sale of Coal Agreements for the period from 1 January 2012 to the date of this announcement does not exceed the de minimis threshold under Chapter 14A of the Listing Rules.
(5)The Shanxi Purchase and Sale of Coal Agreements become effective when they
are duly signed by the parties.
Annual cap
It is expected that the maximum transaction amount in respect of the Shanxi Purchase and Sale of Coal Agreements for the year ended 31 December 2012 will not exceed RMB126 million, which is determined with reference to (i) the anticipated quantity of coal to be purchased by certain power plants of the Company in Shanxi from Datang Fuel Co. for the year ended 31 December 2012; and (ii) the estimated market price of coal.
Historical transaction amounts
Certain power plants of the Company in Shanxi did not purchase any coal from Datang Fuel Co. for the three years ended 31 December 2009, 31 December 2010, and 31 December 2011.
2. Yuncheng Purchase and Sale of Coal Agreement
Date: 6 November 2012
Parties: Yuncheng Power Generation Company and Shaanxi Fuel Company
Major terms:
(1)Subject matter: Yuncheng Power Generation Company agreed to purchase coal
from Shaanxi Fuel Company during the term of validity of the agreement.
The parties may, from time to time during the term of validity of the agreement, enter into specific purchase and sales contracts in respect of the purchase of coal by Yuncheng Power Generation Company provided that such specific purchase and sales contracts shall be subject to the terms of the Yuncheng Purchase and Sale of Coal Agreement.
(2)Consideration: To be determined in the ordinary course of business on
normal commercial terms on the basis of arm's length negotiation according
to prevailing market conditions.
(3)Settlement and payment: Settlement shall be made by the relevant parties in
accordance with the confirmed settlement invoice.
(4)Term: One year, commencing from 1 January 2012 to 31 December 2012.
The Company confirms that each of the applicable percentage ratios (as defined under Rule 14.07 of the Listing Rules) in respect of the transaction amount under the Yuncheng Purchase and Sale of Coal Agreement for the period from 1 January 2012 to the date of this announcement does not exceed the de minimis threshold under Chapter 14A of the Listing Rules.
(5)The Yuncheng Purchase and Sale of Coal Agreement becomes effective when it
is duly signed by both parties.
Annual cap
It is expected that the maximum transaction amount in respect of the Yuncheng Purchase and Sale of Coal Agreement for the year ended 31 December 2012 will not exceed RMB11 million, which is determined with reference to (i) the anticipated quantity of coal to be purchased by Yuncheng Power Generation Company from Shaanxi Fuel Company for the year ended 31 December 2012; and (ii) the estimated market price of coal.
Historical transaction amounts
The total fees paid by Yuncheng Power Generation Company to Shaanxi Fuel Co. for the two years ended 31 December 2009 and 31 December 2010 amounted to approximately RMB46.89 million and RMB9.896 million, respectively. Yuncheng Power Generation Company did not purchase any coal from Shaanxi Fuel Co. for the year ended 31 December 2011.
3. Liancheng Purchase and Sale of Coal Agreement
Date: 6 November 2012
Parties: Liancheng Power Generation Company and Gansu Fuel Co.
Major terms:
(1)Subject matter: Liancheng Power Generation Company agreed to purchase coal
from Gansu Fuel Co. during the term of validity of the agreement.
The parties may, from time to time during the term of validity of the agreement, enter into specific coal supply contracts in respect of the purchase of coal by Liancheng Power Generation Company provided that such specific coal supply contracts shall be subject to the terms of the Liancheng Purchase and Sale of Coal Agreement.
(2)Consideration: To be determined in the ordinary course of business on
normal commercial terms on the basis of arm's length negotiation according
to prevailing market conditions.
(3)Settlement and payment: Settlement shall be made by the relevant parties in
accordance with the confirmed settlement invoice.
(4)Term: Commencing from 1 April 2012 to 31 December 2012.
The Company confirms that each of the applicable percentage ratios (as defined under Rule 14.07 of the Listing Rules) in respect of the transaction amount under the Liancheng Purchase and Sale of Coal Agreement for the period from 1 April 2012 to the date of this announcement does not exceed the de minimis threshold under Chapter 14A of the Listing Rules.
(5)The Liancheng Purchase and Sale of Coal Agreement will become effective
when it is duly signed by both parties.
Annual cap
It is expected that the maximum transaction amount in respect of Liancheng Purchase and Sale of Coal Agreement for the year ended 31 December 2012 will not exceed RMB166 million, which is determined with reference to (i) the anticipated quantity of coal to be purchased by Liancheng Power Generation Company from Gansu Fuel Co. for the year ended 31 December 2012; and (ii) the estimated market price of coal.
Historical transaction amounts
The total fee paid by Liancheng Power Generation Company to Gansu Fuel Co. for the year ended 31 December 2011 amounted to approximately RMB142 million. Liancheng Power Generation Company did not purchase any coal from Gansu Fuel Co. for the two years ended 31 December 2009 and 31 December 2010.
SALE OF COAL TO A SUBSIDIARY OF CDC BY A SUBSIDIARY OF THE COMPANY
Inner Mongolia Purchase and Sale of Coal Agreement
Date: 6 November 2012
Parties: Inner Mongolia Fuel Co. and Datang Fuel Co.
Major terms:
(1)Subject matter: Inner Mongolia Fuel Co. agreed to supply coal to Datang
Fuel Co. during the term of validity of the agreement.
The parties may, from time to time during the term of validity of the agreement, enter into specific coal sales contracts in respect of the purchase of coal by Inner Mongolia Fuel Co. provided that such specific coal supply contracts shall be subject to the terms of the Inner Mongolia Purchase and Sale of Coal Agreement.
(2)Consideration: To be determined in the ordinary course of business on
normal commercial terms on the basis of arm's length negotiation according
to prevailing market conditions.
(3)Settlement and payment: Settlement shall be made by the relevant parties in
accordance with the confirmed settlement invoice.
(4)Term: Commencing from 1 October 2012 to 31 December 2012.
The Company confirms that each of the applicable percentage ratios (as defined under Rule 14.07 of the Listing Rules) in respect of the transaction amount under the Inner Mongolia Purchase and Sale of Coal Agreement for the period from 1 October 2012 to the date of this announcement does not exceed the de minimis threshold under Chapter 14A of the Listing Rules.
(5)The Inner Mongolia Purchase and Sale of Coal Agreement becomes effective
when it is duly signed by both parties.
Annual cap
It is expected that the maximum transaction amount in respect of the Inner Mongolia Purchase and Sale of Coal Agreement for the year ended 31 December 2012 will not exceed RMB300 million, which is determined with reference to (i) the anticipated quantity of coal to be supplied by Inner Mongolia Fuel Co. to Datang Fuel Co. for the year ended 31 December 2012; and (ii) the estimated market price of coal.
Historical transaction amounts
Inner Mongolia Fuel Co. did not supply any coal to Datang Fuel Co. for the three years ended 31 December 2009, 31 December 2010 and 31 December 2011.
REASONS FOR AND BENEFITS OF ENTERING INTO THE CCT AGREEMENTS
The purchase of coal by the subsidiaries of the Company from the subsidiaries of CDC is due to the serious shortage of coal resources in Shanxi and Gansu regions where the subsidiaries and power plants of the Company are located and the relatively limited supply channels in such area. During the severe period of coal market, the entering into of the agreements with the relevant specialized coal companies of CDC can fully leverage the advantages of these specialized companies, secure stable coal supply, and stabilize the market prices of coal to a certain extent, thereby mitigating the adverse impacts of the changes in coal market on power plants of the Company.
The reason for the subsidiaries of the Company to sell coal to Datang Fuel Co. is that Inner Mongolia Fuel Co. is a company specialized in coal trading business. Its coal business has been developing rapidly in recent years. It has certain advantages in the aspects of resources, suppliers and prices. The company itself has the need to explore the domestic market. Datang Fuel Co. is also a specialized company engaged in the sales of coal. It has certain advantages in transportation organization and customer resources in the market. The cooperation between the parties can lead to the complementation of their advantages, and thereby achieve a win-win situation.
The Directors (including the independent non-executive Directors) are of the view that the terms of the CCT Agreements are fair and reasonable, have been entered into after arm's length negotiation between all parties thereto and determined on normal commercial terms and is in the interests of the Company and the Shareholders as a whole.
LISTING RULES IMPLICATIONS
As at the date of this announcement, CDC is the controlling shareholder of the Company, which together with its subsidiaries hold approximately 34.71% of the issued share capital of the Company. Datang Fuel Co., Shaanxi Fuel Company and Gansu Fuel Co. are subsidiaries of CDC and are connected persons of the Company. The transactions contemplated under the CCT Agreements constitute continuing connected transactions of the Company.
Since each of the applicable percentage ratios (as defined under Rule14.07of the Listing Rules) in respect of (i) the aggregated transaction amount for purchases of coal under the Shanxi Purchase and Sale of Coal Agreements, the Yuncheng Purchase and Sale of Coal Agreement and the Liancheng Coal Supply Agreement; and (ii) the transaction amount for sales of coal under the Inner Mongolia Purchase and Sale of Coal Agreement are higher than 0.1% but lower than 5%, each of the CCT Agreements and the transactions contemplated thereunder are subject to the reporting and announcement requirements, but are exempt from the approval by the independent shareholders of the Company under the requirements of Chapter 14A of the Listing Rules.
INFORMATION ON THE PARTIES TO THE AGREEMENTS
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 located in the PRC.
2. Yucheng Power Company is a subsidiary of the Company. It was incorporated
on 28 March 2003. It is running two 600MW coal-fired generating units. The
Company holds 80% equity interest in Yuncheng Power Generation Company.
3. Liancheng Power Generation Company is a subsidiary of the Company. It was
incorporated in Lanzhou city, Gansu Province on 26 August 2001. It is
running two 330MW coal-fired generating units. The Company holds 55% equity
interest in Liancheng Power Generation Company.
4. Yungang Thermal Power Company Limited is a wholly-owned subsidiary of the
Company. It was incorporated in Datong city, Shanxi Province on 14 July
2000. It is running two 220MW coal-fired generating units and two 300MW
coal-fired generating units.
5. Shentou Power Generation Company Limited is a subsidiary of the Company. It
was incorporated in Shuozhou city, Shanxi Province on 8 December 1998. It
is running two 500MW coal-fired generating units. The Company holds 60%
equity interest in Shentou Power Generation Company.
6. Linfen Thermal Power Company Limited is a subsidiary of the Company. It was
incorporated in Linfen city, Shanxi Province on 23 October 2009. It is
running two 300MW coal-fired generating units. The Company holds 80% equity
interest in Linfen Thermal Power Company.
7. Datang Fuel Co. is a wholly-owned subsidiary of CDC. It mainly operates in
the area of electric power fuel trading.
8. Shaanxi Fuel Company is a subsidiary of Datang Shaanxi Power Generation
Company Limited, a wholly-owned subsidiary of CDC. It is principally
engaged in the sale of coal.
9. Gansu Fuel Co. is a subsidiary of China Datang Gansu Power Generation
Company Limited, a wholly-owned subsidiary CDC. It is principally engaged
in coal, heavy oil, coal sampling, sample production, testing and
specialized technical services.
10. Inner Mongolia Fuel Co. is a wholly-owned subsidiary of Beijing Datang Fuel
Company Limited, a subsidiary of the Company. It mainly operates in the
area of electric power fuel trading.
11. CDC was established on 9 March 2003 with registered capital of RMB15.394
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.
BOARD'S APPROVAL
None of the Director has material interest in the CCT Agreements. Those connected Directors, including Liu Shunda, Hu Shengmu and Fang Qinghai, who are the principal management staff of CDC, have abstained from voting at the Board meeting for approval of the relevant transaction in accordance with the requirements of the listing rules of the Shanghai Stock Exchange.
DEFINITIONS
In this announcement, unless the context otherwise requires, the following expressions have the following meanings:
"Board" the board of Directors "CCT Agreements" the Shanxi Purchase and Sale of Coal Agreements, the Yuncheng Purchase and Sale of Coal Agreement, the Liancheng Purchase and Sale of Coal Agreement and the Inner Mongolia Purchase and Sale of Coal Agreement "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 "certain power plants of the the relevant power plants owned by the Company in Shanxi" Company in Shanxi region (mainly including Shanxi Datang International Yungang Thermal Power Company Limited, Shanxi Datang International Shentou Power Generation Company Limited, Shanxi Datang International Linfen Thermal Power Company Limited and Shanxi Datang International Yuncheng Power Generation Company Limited) , details of which are set out in the section entitled "Information on the Parties to the Agreements" "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(s)" has the meaning ascribed to it under the Listing Rules "connected transaction(s)" has the meaning ascribed to it under the Listing Rules "Datang Fuel Co." Datang Electric Power Fuel Company Limited, a wholly-owned subsidiary of CDC, details of which are set out in the section entitled "Information on the Parties to the Agreements" "Directors" the director(s) of the Company "Gansu Fuel Co." Gansu Datang Fuel Limited Company Ltd, details of which are set out in the section entitled "Information on the Parties to the Agreements" "Inner Mongolia Fuel Co." Inner Mongolia Electric Power Fuel Company Ltd., a wholly-owned subsidiary of Beijing Datang Fuel Company Limited, a subsidiary of the Company, details of which are set out in the section entitled "Information on the Parties to the Agreements"
"Inner Mongolia Purchase and the agreement dated 6 November 2012 entered Sale of Coal Agreement"
into between Inner Mongolia Fuel Co. and Datang Fuel Co.
"Liancheng Power Generation Gansu Datang International Liancheng Power Company"
Generation Company Ltd, details of which are set out in the section entitled "Information on the Parties to the Agreements" "Liancheng Purchase and Sale the agreement dated 6 November 2012 entered of Coal Agreement" into between Liancheng Power Generation Company. and Gansu Fuel Co. "Linfen Power Generation Shanxi Datang International Linfen Power Company" Generation Company Ltd, details of which are set out in the section entitled "Information on the Parties to the Agreements" "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 "Shaanxi Fuel Company" Datang Shaanxi Power Generation Company Limited, a wholly-owned subsidiary of Shaanxi Datang Power Generation Company Limited, a wholly-owned subsidiary of CDC, details of which are set out in the section entitled "Information on the Parties to the Agreements"
"Shanxi Purchase and Sale of four agreements all dated 6 November entered Coal Agreements"
into between certain power plants of the company in Shanxi and Datang Fuel Co. "Shentou Power Generation Shanxi Datang International Shentou Power Company" Generation Company Ltd, details of which are set out in the section entitled "Information on the Parties to the Agreements" "Stock Exchange" The Stock Exchange of Hong Kong Limited "Yuncheng Power Generation Datang Shanxi International Yuncheng Power Company" Generation Company Limited, a subsidiary of the Company, details of which are set out in the section entitled "Information on the Parties to the Agreements" "Yuncheng Purchase and Sale the agreement dated 6 November 2012 entered of Coal Agreement" into between Yuncheng Power Generation Company and Shaanxi Fuel Company "Yungang Thermal Power Shanxi Datang International Yungang Thermal Company" Power Company Ltd, details of which are set out in the section entitled "Information on the Parties to the Agreements" "%" percent By Order of the Board Zhou Gang Secretary to the Board
Beijing, the PRC, 7 November 2012
As at the date of this announcement, the Directors of the Company are:
Liu Shunda, Hu Shengmu, Cao Jingshan, Fang Qinghai, Zhou Gang, Liu Haixia, Guan Tiangang, Mi Dabin, Ye Yonghui, Li Gengsheng, Li Yanmeng*, Zhao Zunlian*, Li Hengyuan*, Zhao Jie*, Jiang Guohua*
* Independent non-executive Directors
PINXRelated Shares:
Datang Intl H