11th Jan 2007 07:00
Datang Intl Power Generation Co Ld11 January 2007 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) DISCLOSEABLE AND CONNECTED TRANSACTION INVESTMENT AGREEMENT The Board announces that on 9 January 2007, the Company entered into the Investment Agreement with BEIG, CDGC and MDHNto establish Tuoketuo No. 2 Power Co. for the purposes of planning, constructing and operating the Tuoketuo Power PlantProject. The Company, BEIG, CDGC and MDHN agreed to contribute to the establishment of Tuoketuo No. 2 Power Co. in theproportion of 40%, 25%, 20% and 15%, respectively. DISCLOSEABLE AND CONNECTED TRANSACTION According to the Listing Rules, as each of the assets and consideration ratios (as defined in Rule 14.07 of the ListingRules) is more than 5% but less than 25%, the Investment Agreement constitutes a discloseable transaction of theCompany which is subject to the notification and publication requirements as set out in Rules 14.34 to 14.39 of theListing Rules. As at the date of the Investment Agreement, BEIG held approximately 11.86% of the issued share capital of the Companyand 25% of the interest of Tuoketuo Power Company, a subsidiary of the Company; CDGC held approximately 34.96% of theissued share capital of the Company and MDHN held 15% of the interest of Tuoketuo Power Company. Accordingly, each ofBEIG, CDGC and MDHN is a connected person of the Company under the Listing Rules and therefore the Investment Agreementconstitutes a connected transaction of the Company under the Listing Rules. As each of the assets and considerationratios (as defined in Rule 14.07 of the Listing Rules) is more than 2.5%, the Investment Agreement is subject to thereporting, announcement and independent shareholders' approval requirements under Chapter 14A of the Listing Rules. TheCompany will also disclose the relevant details in the next published annual report and accounts of the Company inaccordance with the relevant requirements as set out in Rule 14A.45 of the Listing Rules. A circular containing detailsof the Investment Agreement, a letter from the independent board committee of the Company, and a letter from theindependent financial advisor, both advising in respect of the terms of the Investment Agreement will be despatched tothe Shareholders as soon as practicable. The notice of EGM will also be despatched to the Shareholders as soon aspracticable. INVESTMENT AGREEMENT Date 9 January 2007 Parties to the Investment Agreement 1. The Company,2. BEIG,3. CDGC,4. MDHN. Major terms of the Investment Agreement Pursuant to the Investment Agreement, the Company, BEIG, CDGC and MDHN agreed to contribute in cash to theestablishment of Tuoketuo No. 2 Power Co. in the proportion of 40%, 25%, 20% and 15%, respectively, for the purposes ofplanning, constructing and operating the Tuoketuo Power Plant Project. The total investment amount of the Tuoketuo Power Plant Project is approximately RMB10,193,530,000 (equivalent toapproximately HK$10,165,067,810), subject to the final approval by the relevant government authorities in the PRC. Thefinal registered capital of Tuoketuo No. 2 Power Co. will account for approximately 20% of the total investment amountof the project, i.e. approximately RMB2,038,710,000 (equivalent to approximately HK$2,033,017,551). Pursuant to the Investment Agreement, the Company, BEIG, CDGC and MDHN will be responsible for contributing in cash inthe proportion of 40% (i.e. approximately RMB815,484,000, equivalent to approximately HK$813,207,020), 25% (i.e.approximately RMB509,677,500, equivalent to approximately HK$508,254,388), 20% (i.e. approximately RMB407,742,000,equivalent to approximately HK$406,603,510) and 15% (i.e. approximately RMB305,806,500, equivalent to approximatelyHK$304,952,633), respectively, to the registered capital of Tuoketuo No. 2 Power Co.. There is no time limit specifiedin the Investment Agreement within which the parties shall contribute in full to the registered capital of Tuoketuo No.2 Power Co. and it is expected that the parties to the Investment Agreement will contribute their respective shares tothe registered capital of Tuoketuo No. 2 Power Co. in stages in line with the construction progress of the TuoketuoPower Plant Project. As at the date of this announcement, the parties to the Investment Agreement have not contributedany registered capital to Tuoketuo No. 2 Power Co. The Company's contribution to the registered capital of Tuoketuo No.2 Power Co. will be funded by internal resources. Pursuant to the Investment Agreement, all funds required for the construction of the Tuoketuo Power Plant Project willbe funded by the registered capital of Tuoketuo No. 2 Power Co. and financing resources in the PRC, i.e. loans frombanks. If necessary, the respective parties to the Investment Agreement will severally guarantee against such financingin proportion to their respective capital contributions in Tuoketuo No. 2 Power Co. and Tuoketuo No. 2 Power Co. willprovide counter-guarantee with its assets or other applicable means against the guarantees given by the respectiveparties to the Investment Agreement. In the event of any further capital injection or other guarantees againstborrowings required upon the Company, the Company will comply with the relevant requirements under the Listing Rules ifand when necessary. Effective date of the Investment Agreement The Investment Agreement will become effective when the respective parties to the Investment Agreement haverespectively obtained approvals from their authorities for the investment items in the Investment Agreement. As at thedate of this announcement, the Company still has to submit the Investment Agreement to its general meeting forconsideration and approval. Other major terms of the Investment Agreement The term of operation of Tuoketuo No. 2 Power Co. shall be 30 years from the date of issuance of the business licence. In order to enable the Company to obtain over 50% of the voting rights in the general meetings and board meetings ofTuoketuo No. 2 Power Co. upon its establishment, CDGC and the Company entered into a separate agreement and pursuant towhich, CDGC agreed that while exercising the voting rights on the general meetings and board meetings of Tuoketuo No. 2Power Co., CDGC will vote in line with the Company. As a result, Tuoketuo No. 2 Power Co. will become a subsidiary ofthe Company and the results of Tuoketuo No. 2 Power Co. will be fully consolidated into the Group's financialstatements. INFORMATION RELATING TO TUOKETUO NO. 2 POWER CO. Pursuant to the Investment Agreement, Tuoketuo No. 2 Power Co., upon its establishment, will plan, construct andoperate the Tuoketuo Power Plant Project which comprises four 600MW air-cooling coal-fired power generating units.Located in Hohhot City, Inner Mongolia Autonomous Region, the PRC, all the electricity generated by the power plantwill be transmitted to the North China Power Grid. INFORMATION RELATING TO 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 its mainservice areas in the PRC. INFORMATION RELATING TO BEIG BEIG is a wholly state-owned company which is allowed to engage in any business activities within the scope ofoperation as permitted by the laws and regulations. BEIG is principally engaged in the development and investment ofvarious forms of energy. INFORMATION RELATING TO CDGC CDGC is a state-owned enterprise; its main scope of operations are the development, investment, construction, operationand management of power energy, organisation of power (thermal) production and sales, power technology development andconsultation, and so forth. INFORMATION RELATING TO MDHN MDHN is a joint stock limited company and its scopes of operation are coal-fired power generation and supply of thermalpower. REASONS FOR AND BENEFITS OF ENTERING INTO THE INVESTMENT AGREEMENT The Tuoketuo Power Plant Project is located in a place with abundant coal resources. As such, fuel supplies withrelatively low costs for the project can be guaranteed which will help lower the operation costs of the Tuoketuo PowerPlant Project. Upon completion, the project will supply electricity directly to the North China Power Grid.Beijing-Tianjian-Tangshan ("BTT") area, which is within the North China Power Grid, is the load centre for electricityconsumption with fast economic growth. The Company considers that the Tuoketuo Power Plant Project, upon itscompletion, will benefit from the growing demand for electricity in the BTT area, which in turn will enhance theCompany's profitability as a whole. The Directors consider that the entering into the Investment Agreement willfacilitate the profit growth of the Company. The Directors consider that the terms of the Investment Agreement were negotiated on an arm's length basis between theCompany and the parties thereto and were determined on normal commercial terms. The Directors consider that the termsof Investment Agreement are fair and reasonable and in the best interest of the Company and the Shareholders as awhole. DISCLOSEABLE AND CONNECTED TRANSACTION According to the Listing Rules, as each of the assets and consideration ratios (as defined in Rule 14.07 of the ListingRules) is more than 5% but less than 25%, the Investment Agreement constitutes a discloseable transaction of theCompany which is subject to the notification and publication requirements as set out in Rules 14.34 to 14.39 of theListing Rules. As at the date of the Investment Agreement, BEIG held approximately 11.86% of the issued share capital of the Companyand 25% of the interest of Tuoketuo Power Company, a subsidiary of the Company; CDGC held approximately 34.96% of theissued share capital of the Company and MDHN held 15% of the interest of Tuoketuo Power Company. Accordingly, each ofBEIG, CDGC and MDHN is a connected person of the Company under the Listing Rules and therefore the Investment Agreementconstitutes a connected transaction of the Company under the Listing Rules. As each of the assets and considerationratios (as defined in Rule 14.07 of the Listing Rules) is more than 2.5%, the Investment Agreement is subject to thereporting, announcement and independent shareholders' approval requirements under Chapter 14A of the Listing Rules. TheCompany will also disclose the relevant details in the next published annual report and accounts of the Company inaccordance with the relevant requirements as set out in Rule 14A.45 of the Listing Rules. Shareholders having material interests in the transaction and their respective Associates will abstain from voting.BEIG and CDGC and their respective Associates will abstain from voting in accordance with the Listing Rules and thatthe voting will be taken by way of a poll. INDEPENDENT BOARD COMMITTEE AND INDEPENDENT FINANCIAL ADVISOR An independent board committee comprising the independent non-executive Directors will be formed to advise theindependent shareholders on the terms of the Investment Agreement. The Company will appoint an independent financial advisor to advise the independent board committee of the Company andthe independent shareholders on the terms of the Investment Agreement. DESPATCH OF CIRCULAR A circular containing details of the Investment Agreement, a letter from the independent board committee of theCompany, and a letter from the independent financial advisor, both advising in respect of the terms of the InvestmentAgreement, will be despatched to the Shareholders as soon as practicable. The notice of the EGM will also be despatchedto the Shareholders as soon as practicable. DEFINITIONS In this announcement, unless the context otherwise requires, the following expressions have the following meanings: "A Share(s)" the domestic ordinary share(s) of the Company with a nominal value of RMB1.00 each "Associate(s)" has the meaning ascribed to it under the Listing Rules "BEIG" Beijing Energy Investment (Group) Company Limited (Chinese Words), a substantial Shareholder of the Company holding approximately 11.96% of the issued share capital of the Company "Board" board of Directors "CDGC" China Datang Corporation (Chinese Words), a state-owned enterprise established under the laws of the PRC and a substantial Shareholder of the Company holding approximately 34.96% of the issued share capital of the Company "Company" Datang International Power Generation Co., Ltd. (Chinese Words), a sino-foreign joint stock limited company incorporated in the PRC on 13 December 1994, of which the H Shares are listed on The Stock Exchange of Hong Kong Limited and The London Stock Exchange Limited and the A Shares are listed on the Shanghai Stock Exchange "connected person" has the meaning ascribed to it under the Listing Rules "Directors" directors of the Company "EGM" the extraordinary general meeting of the Company to be held to consider and, if thought fit, approve the Investment Agreement "H Share(s)" the overseas listed foreign shares of the Company with a nominal value of RMB1.00 each and are listed on The Stock Exchange of Hong Kong Limited and The London Stock Exchange Limited "HK$" Hong Kong dollar(s), the lawful currency of Hong Kong "Hong Kong" the Hong Kong Special Administrative Region of the PRC "Investment Agreement" the investment agreement in relation to jointly establish Tuoketuo No. 2 Power Co. for the purposes of planning, constructing and operating the Tuoketuo Power Plant Project, dated on 9 January 2007 entered into between the Company, BEIG, CDGC and MDHN "Listing Rules" Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited "MDHN" Inner Mongolia Mengdian Huaneng Thermal Power Corporation Limited, of which the shares are listed and traded on the Shanghai Stock Exchange "PRC" the People's Republic of China "RMB" Renminbi, the lawful currency of the PRC "Shareholder(s)" shareholder(s) of the Company "Tuoketuo No. 2 Power Co." Inner Mongolia Datang International Tuoketuo No. 2 Power Generation Company Limited "Tuoketuo Power Company" Inner Mongolia Datang International Tuoketuo Power Generation Company Limited, a subsidiary of the Company, of which its 60% shares are held by the Company "Tuoketuo Power Plant Project" the power plant project of Phases IV and V of Tuoketuo power plant with a capacity of 4 x 600MW "%" per cent. By Order of the Board Yang Hongming Company Secretary Beijing, the PRC, 10 January 2007 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, TongYunshang, Xie Songlin*, Xu Daping*, Liu Chaoan*, Yu Changchun* and Xia Qing* * Independent non-executive Directors For the purpose of this announcement, HK$1.00 is equivalent to RMB1.0028. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Datang Intl H