Last checked at 24 Oct 2011 15:17
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 CONNECTED TRANSACTION
FRAMEWORK ENTRUSTED LOAN AGREEMENT
On 24 October 2011, the Company entered into the Framework Entrusted Loan Agreement with Energy and Chemical Company, CCB Diao Yu Tai Branch and Duolun Coal Chemical Company in relation to the provision of the Entrusted Loan by the Company or Energy and Chemical Company to Duolun Coal Chemical Company through the Framework Entrusted Loan Arrangement, in which CCB Diao Yu Tai Branch acts as the lending agent.
CONNECTED TRANSACTION
As at the date of this announcement, Duolun Coal Chemical Company is owned as to 60% and 40% by Energy and Chemical Company, and CDC, respectively. 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 as at the date of this announcement. Duolun Coal Chemical Company is therefore a connected person of the Company and the Framework Entrusted Loan Agreement constitutes a connected transaction of the Company under Chapter 14A of the Listing Rules. As one or more of the applicable percentage ratios (as defined in Rule 14.07 of the Listing Rules) for the Entrusted Loan under the Framework Entrusted Loan Agreement aggregated with the entrusted loans provided by the Group to Duolun Coal Chemical Company in the preceding 12 months is more than 5%, the entrusted loan matters and the Framework Entrusted Loan Agreement are subject to the requirements of reporting, announcement and approval by the independent Shareholders of the Company under Chapter 14A of the Listing Rules. The Company will disclose the relevant details in the next annual report and accounts of the Company in accordance with the relevant requirements as set out in Rule14A.45 of the Listing Rules. A circular containing details of the entrusted loan matters and the Framework Entrusted Loan Agreement, a letter from the independent board committee and a letter from the independent financial advisor, both advising the entrusted loan matters and the terms of the Framework Entrusted Loan Agreement will be despatched to the Shareholders on or before 2 November 2011.
FRAMEWORK ENTRUSTED LOAN AGREEMENT
Date and Subject Matter
On 24 October 2011, the Company entered into the Framework Entrusted Loan Agreement with Energy and Chemical Company, CCB Diao Yu Tai Branch and Duolun Coal Chemical Company in relation to the provision of the Entrusted Loan by the Company or Energy and Chemical Company to Duolun Coal Chemical Company through the Framework Entrusted Loan Arrangement, in which CCB Diao Yu Tai Branch acts as the lending agent. Parties (1) the Company;(2) Energy and Chemical Company; (3) CCB Diao Yu Tai Branch; (4) Duolun Coal Chemical Company.
Major terms of the Framework Entrusted Loan Agreement
Framework Entrusted Loan Arrangement
Pursuant to the Framework Entrusted Loan Agreement, CCB Diao Yu Tai Branch is designated by the Company or Energy and Chemical Company to act as the lending agent to, inter alia, release the Entrusted Loan by various tranches to Duolun Coal Chemical Company through the Framework Entrusted Loan Arrangement.The parties agreed that they shall enter into separate entrusted loan agreements in relation to the provision of various tranches of the Entrusted Loan through the Framework Entrusted Loan Arrangement during the term of the Framework Entrusted Loan Agreement provided that such separate entrusted loan agreements shall always be in line with the principles of the Framework Entrusted Loan Agreement and the terms and conditions of the Entrusted Loan Agreement.The Entrusted Loan Agreement in relation to the provision of the first tranche of the Entrusted Loan amounting to RMB500 million has been entered into between the Company, CCB Diao Yu Tai Branch and Duolun Coal Chemical Company on 12 October 2011.
Principal amount of the Entrusted Loan
The principal amount of the Entrusted Loan is RMB2 billion. Since the Entrusted Loan Agreement in relation to the provision of the first tranche of the Entrusted Loan amounting to RMB500 million has been entered into, the remaining balance of the Entrusted Loan amounts to RMB1.5 billion.Term
The term for the Framework Entrusted Loan Agreement is 36 months commencing from 12 October 2011 to 11 October 2014.
Interest rate
At a floating interest rate, being the benchmark interest rate to be charged for the same level of loans in RMB by the People's Bank of China for the same period as announced by the People's Bank of China on the date when each tranche of borrowing is withdrawn and such interest rate is to be adjusted annually. The adjustment date is 21st December of each year. The adjusted interest rate will be the benchmark interest rate for the same level of loans in RMB for the same period announced by the People's Bank of China on the adjustment date. Such interest rate is arrived at after arm's length negotiation between the Company and Duolun Coal Chemical Company in consideration of the overall reduction in capital costs to the Group after the accounts of Duolun Coal Chemical Company (being the controlled subsidiary of the Company) are consolidated into the accounts of the Company.
Repayment schedule of the principal of the Entrusted Loan
One-off repayment of the principal by Duolun Coal Chemical Company upon maturity of the relevant entrusted loan agreements.
Payment schedule of interests of the Entrusted Loan
Interests shall be settled by Duolun Coal Chemical Company on a quarterly basis. The settlement date falls on the twentieth (20th) day of the last month of each quarter.
Effective Date
The Framework Entrusted Loan Agreement shall become effective when it is duly signed by the parties and is approved by the internal authorities of the parties (or the internal approval procedures of the parties are implemented).
Entrusted Loan Agreement
The Entrusted Loan Agreement in relation to the provision of the first tranche of the Entrusted Loan amounting to RMB500 million has been entered into between the Company, CCB Diao Yu Tai Branch and Duolun Coal Chemical Company on 12 October 2011, details of the Entrusted Loan Agreement were set out in the announcement of the Company dated 12 October 2011.
REASONS FOR AND BENEFITS OF ENTERING INTO THE FRAMEWORK ENTRUSTED LOAN AGREEMENT
In order to ensure the smooth progress of the Duolun Coal Chemical Project, the Company and Energy and Chemical Company intend to provide the Entrusted Loan amounting to RMB2 billion (including the first tranche of the Entrusted Loan amounting to RMB500 million) to Duolun Coal Chemical Company according to the actual situation of the Duolun Coal Chemical Project. The Entrusted Loan is beneficial for the smooth progress of subsequent project construction of the Duolun Coal Chemical Project and is to ensure repayment of due borrowings by Duolun Coal Chemical Company. It is also considered that the overall capital costs to the Group will be reduced after the accounts of Duolun Coal Chemical Company (being the controlled subsidiary of the Company) are consolidated into the accounts of the Company. The Directors (excluding the independent non-executive Directors whose views will be contained in the circular after considering the advice from the independent financial advisor) are of the view that the terms of the Framework Entrusted Loan Agreement are fair and reasonable, have been entered into after arm's length negotiation between all parties thereto and determined on normal commercial terms and are in the interests of the Company and the Shareholders as a whole.
INFORMATION RELATING TO THE COMPANY
The Company is principally engaged in the development and operation of power plants, the sale of electricity and thermal power, and the repair, testing and maintenance of power equipment as well as the provision of power-related technical services. The main service areas of the Company are in the PRC.
INFORMATION RELATING TO DUOLUN COAL CHEMICAL COMPANY
Duolun Coal Chemical Company was duly incorporated on 19 August 2009 with a registered capital of RMB4,050.00 million. Duolun Coal Chemical Company is principally responsible for the construction and operation of the coal-based olefin project with an annual output of 460,000 tonnes. The equity structure of Duolun Coal Chemical Company is as follows: Energy and Chemical Company, the Company's wholly-owned subsidiary, holds 60% equity interests, and CDC, the controlling Shareholder of the Company, holds 40% equity interests. As at 31 December 2010, Duolun Coal Chemical Company's total assets amounted to approximately RMB20,722.62 million; total liabilities amounted to approximately RMB16,687.76 million; and the asset-to-liability ratio was approximately 80.53% (the aforesaid figures were audited). As at 30 June 2011, Duolun Coal Chemical Company's total assets amounted to approximately RMB21,552.31 million; total liabilities amounted to approximately RMB17,506.20 million; and the asset-to-liability ratio was approximately 81.23% (the aforesaid figures have not been audited).CONNECTED TRANSACTION
As at the date of this announcement, Duolun Coal Chemical Company is owned as to 60% and 40% by Energy and Chemical Company and CDC, respectively. 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 as at the date of this announcement. Duolun Coal Chemical Company is therefore a connected person of the Company and the Framework Entrusted Loan Agreement constitutes a connected transaction of the Company under Chapter 14A of the Listing Rules. As one or more of the applicable percentage ratios (as defined in Rule 14.07 of the Listing Rules) for the Entrusted Loan under the Framework Entrusted Loan Agreement aggregated with the entrusted loans provided by the Group to Duolun Coal Chemical Company in the preceding 12 months is more than 5%, the entrusted loan matters and the Framework Entrusted Loan Agreement are subject to the requirements of reporting, announcement and approval by the independent Shareholders of the Company under Chapter 14A of the Listing Rules. The Company will disclose the relevant details in the next annual report and accounts of the Company in accordance with the relevant requirements as set out in Rule14A.45 of the Listing Rules. A circular containing details of the entrusted loan matters and the Framework Entrusted Loan Agreement, a letter from the independent board committee and a letter from the independent financial advisor, both advising the entrusted loan matters and the terms of the Framework Entrusted Loan Agreement will be despatched to the Shareholders on or before 2 November 2011.Any Shareholder with a material interest in the transaction and its associates will abstain from voting at the extraordinary general meeting to be held by the Company, to, among others, consider and approve the Framework Entrusted Loan Agreement. Therefore, CDC and its associates shall abstain from voting at the extraordinary general meeting to approve the Framework Entrusted Loan Agreement.
INDEPENDENT BOARD COMMITTEE AND INDEPENDENT FINANCIAL ADVISOR
An independent board committee comprising the independent non-executive Directors will be formed to advise the independent Shareholders on the terms of the Framework Entrusted Loan Agreement. Each of the independent non-executive Director does not have any material interest in the Framework Entrusted Loan Agreement. The Company has appointed Mizuho Securities as the independent financial advisor to advise the independent board committee of the Company and the independent Shareholders on the terms of the Framework Entrusted Loan Agreement.
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 and are listed on the Shanghai Stock Exchange "Board" the board of Directors of the Company "CCB Diao Yu Tai Branch" the Diao Yu Tai Branch of China Construction Bank Corporation, a bank incorporated in the PRC and is principally engaged in banking, financial and other finance-related services "CDC" China Datang Corporation, a State-owned enterprise established under the laws of the PRC and is the controlling Shareholder of the Company pursuant to the Listing Rules 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 "Duolun Coal Chemical Datang Inner Mongolia Duolun Coal ChemicalCompany" Company Limited, which constructs and operates the Duolun Coal Chemical Project "Duolun Coal Chemical the project located in Duolun County in the InnerProject" Mongolia Autonomous Region which uses the brown coal from the East Unit 2 coal mine of Shengli Coal Mine as raw materials for the production of polypropylene chemical products by employing the pulverised coal gasification technology, the synthetic gas purification technology, large-scale methanol synthesis technology, the methanol-to-propylene technology and the propylene polymerisation technology "Energy and Chemical Datang Energy and Chemical Company Limited, aCompany" wholly-owned subsidiary of the Company, principally engaged in the production and sales businesses for the products including coal-alkene, coal-natural gas and extraction of alumina from pulverized fuel ash "Entrusted Loan" the entrusted loan of a principal amount of RMB2 billion "Entrusted Loan Agreement" the entrusted loan agreement entered into on 12 October 2011 between the Company, CCB Diao Yu Tai Branch and Duolun Coal Chemical Company in respect of the provision of the first tranche of the Entrusted Loan in the sum of RMB500 million by the Company , details of which were set out in the announcement dated 12 October 2011 "Framework Entrusted Loan the framework entrusted loan agreement entered into onAgreement" 24 October 2011 between the Company, Energy and Chemical Company, CCB Diao Yu Tai Branch and Duolun Coal Chemical Company in respect of the Framework Entrusted Loan Arrangement "Framework Entrusted Loan the arrangement where CCB Diao Yu Tai Branch isArrangement" designated by the Company or Energy and Chemical Company to act as the lending agent to, inter alia, release the Entrusted Loan in various tranches to Duolun Coal Chemical Company "Group" the Company and its subsidiaries"H Share(s)" the overseas listed foreign shares of the Company with a nominal value of RMB1.00 each, which are listed on the Stock Exchange and the London Stock Exchange "Hong Kong" the Hong Kong Special Administrative Region of the PRC "Listing Rules" the Rules Governing the Listing of Securities on the Stock Exchange"Mizuho Securities" Mizuho Securities Asia Limited, the independent financial adviser to the independent board committee and the independent Shareholders in respect of the terms of the Framework Entrusted Loan Agreement, and a licensed corporation for types 1 (dealing in securities), 2 (dealing in futures contracts), 4 (advising on securities), 5 (advising on futures contracts), 6 (advising on corporate finance) and 9 (asset management) regulated activities under the SFO"PRC" the People's Republic of China "RMB" Renminbi, the lawful currency of the PRC "SFO" the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)"Shareholder(s)" the holder(s) of the Share(s) "Shares" the ordinary shares of the Company with a nominal value of RMB1.00 each, comprising domestic Shares and H Shares "Stock Exchange" The Stock Exchange of Hong Kong Limited "%" percent By Order of the Board Zhou Gang Secretary to the Board Beijing, the PRC, 24 October 2011
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, Su Tiegang, Ye Yonghui, Li Gengsheng, Li Yanmeng*, Zhao Zunlian*, Li Hengyuan*, Zhao Jie* and Jiang Guohua*.
* Independent non-executive Directors
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