Datang Intl H Regulatory News (DAT)

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong KongLimited take no responsibility for the contents of this announcement, make norepresentation as to its accuracy or completeness and expressly disclaim anyliability whatsoever for any loss howsoever arising from or in reliance uponthe 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 ENTRUSTED LOAN CONTRACT On 12 February 2015, the Company, Duolun Coal Chemical Company and DatangFinance Company entered into the Entrusted Loan Contract. The Company shallentrust Datang Finance Company as the lending agent to provide the entrustedloan of an aggregate amount of RMB1 billion to Duolun Coal Chemical Companyduring the term of the contract. LISTING RULES IMPLICATIONS As at the date of this announcement, CDC together with its subsidiaries holdapproximately 34.71% of the issued share capital of the Company. Duolun CoalChemical Company is a subsidiary of the Company and is owned as to 40% by CDC.Datang Finance Company is a subsidiary of CDC. Both Duolun Coal ChemicalCompany and Datang Finance Company are therefore connected persons of theCompany and the transaction under the Entrusted Loan Contract constitutes aconnected transaction of the Company under Chapter 14A of the Listing Rules. As the applicable percentage ratios (as defined in Rule 14.07 of the ListingRules) for the amount of the entrusted loan under the Entrusted Loan Contractare all higher than 0.1% but lower than 5%, the Entrusted Loan Contract is onlysubject to the reporting and announcement requirements under Chapter 14A of theListing Rules, but does not require the approval by the independentShareholders of the Company under Chapter 14A of the Listing Rules. ENTRUSTED LOAN CONTRACT Date and Subject Matter On 12 February 2015, the Company, Duolun Coal Chemical Company and DatangFinance Company entered into the Entrusted Loan Contract. The Company shallentrust Datang Finance Company as the lending agent to provide the entrustedloan of an aggregate amount of RMB1 billion to Duolun Coal Chemical Companyduring the term of the contract. Parties 1. The Company, as the entrusted lender; 2. Datang Finance Company, as the lending agent; and 3. Duolun Coal Chemical Company, as the borrower. Major Terms 1. Entrusted Loan Arrangement Pursuant to the Entrusted Loan Contract, the Company entrusts Datang Finance Company as the lending agent to provide the entrusted loan to Duolun Coal Chemical Company. 2. Amount of the entrusted loan The loan amount for Duolun Coal Chemical Company under the Entrusted Loan Contract shall be RMB1 billion. 3. Term The term is 12 months commencing from 12 February 2015 to 11 February 2016. 4. Interest rate The loan interest rate shall be a floating rate, being the benchmark interest rate to be charged for the same level of loans in RMB as announced for implementation by the People's Bank of China on the actual date when the loan is granted plus 10%. In the event that the People's Bank of China adjusts the benchmark interest rate during the term of contract, 21st December of each year shall be the adjustment date for the interest rate under the contract. The adjusted borrowing interest rate will be the benchmark interest rate for the same level of loans in RMB announced for implementation by the People's Bank of China on the adjustment date plus 10%. As at the date of this announcement, the prevailing benchmark interest rate for one-year loans in RMB as announced by the People's Bank of China is 6% per annum. 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 a subsidiary of the Company) are consolidated into the accounts of the Company. 5. Calculation of interests Interests under the entrusted loan shall be accrued on a daily basis and settled on a quarterly basis. The settlement date falls on the twentieth (20th) day of the last month of each quarter. 6. Handling fee The handling fee of the entrusted loan shall be 0.01% of the amount under the Entrusted Loan Contract. The handling fee of the entrusted loan shall be settled by the Duolun Coal Chemical Company to Datang Finance Company in one lump sum within five working days after the Entrusted Loan Contract becomes effective. 7. Use of proceeds of the entrusted loan Replenishment of liquidity and the replacement of due borrowings. 8. Repayment schedule of the entrusted loan The specific withdrawal amount, withdrawal date, as well as repayment date under the Entrusted Loan Contract are subject to the actual amount and dates as stipulated in the loan certificate of Duolun Coal Chemical Company. 9. Effective date The Entrusted Loan Contract shall become effective when it is duly signed by the legal representatives or authorised agent of both parties and affixed with their respective seals. REASONS FOR AND BENEFITS OF ENTERING INTO THE ENTRUSTED LOAN CONTRACT In view of the cooperation history between Datang Finance Company and theCompany and given that the provision of entrusted loan services by DatangFinance Company is covered within the capital risks control measures under theFinancial Services Agreement entered into between the Company and DatangFinance Company on 15 October 2013, Datang Finance Company has betterunderstanding of the operations of the Company which will allow more expedientand efficient services than those rendered by other PRC commercial banks.Further, the handling fees charged by Datang Finance Company will not be higherthan those charged by other PRC commercial banks. In view of the aboveconsiderations, the Company appointed Datang Finance Company, rather than otherPRC commercial banks, as the lending agent. Further, considering the capital risks control measures under the FinancialServices Agreement and the terms under the Entrusted Loan Contract are normalcommercial terms which confer no additional obligations nor risks on theCompany when compared with other entrusted loan contracts in the market, theCompany considers that no additional risks will be involved by appointingDatang Finance Company as the lending agent under the Entrusted Loan Contract. In order to ensure the replacement of due borrowings on schedule as well as toreplenish liquidity loans in a timely manner, the Company provides theentrusted loan of not exceeding RMB1 billion to Duolun Coal Chemical Company.The Company is of the view that the entrusted loan will be primarily utilisedby Duolun Coal Chemical Company to replenish its liquidity loans and replacedue borrowings, and is thus beneficial for the smooth progress of theproduction and operation activities of Duolun Coal Chemical Company. Considering the possible higher financial costs for Duolun Coal ChemicalCompany to obtain the same loan from other commercial banks when compared withthe financial costs incurred by the Company to obtain the funding of theentrusted loan, the Company considers that the overall capital costs to theGroup will be relatively reduced after the accounts of Duolun Coal ChemicalCompany (being the subsidiary of the Company) are consolidated into theaccounts of the Company. DIRECTORS' CONFIRMATION The Directors (including the independent non-executive Directors) are of theview that the terms of the Entrusted Loan Contract are fair and reasonable,have been entered into after arm's length negotiation between all partiesthereto and determined on normal commercial terms in ordinary and usual courseof business and is in the interests of the Company and its Shareholders as awhole. INFORMATION ON THE PARTIES 1. 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. 2. Duolun Coal Chemical Company Duolun Coal Chemical Company, a subsidiary of the Company, was duly established on 19 August 2009 with a paid-in capital of RMB4,050 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, a wholly-owned subsidiary of the Company, holds 60% equity interests, and CDC holds 40% equity interests. 3. Datang Finance Company Datang Finance Company is a non-banking financial institution duly incorporated in the PRC on 10 May 2005. Its registered capital is RMB4,869,871,590.23. Its principal business includes, among others, the provision of deposit services, loan services, entrusted loan services and entrusted investment services. 4. CDC CDC was established on 9 March 2003 and has 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. LISTING RULES IMPLICATIONS As at the date of this announcement, CDC together with its subsidiaries holdapproximately 34.71% of the issued share capital of the Company. Duolun CoalChemical Company is a subsidiary of the Company and is owned as to 40% by CDC.Datang Finance Company is a subsidiary of CDC. Both Duolun Coal ChemicalCompany and Datang Finance Company are therefore connected persons of theCompany and the transaction under the Entrusted Loan Contract constitutes aconnected transaction of the Company under Chapter 14A of the Listing Rules. As the applicable percentage ratios (as defined in Rule 14.07 of the ListingRules) for the amount of the entrusted loan under the Entrusted Loan Contractare all higher than 0.1% but lower than 5%, the Entrusted Loan Contract is onlysubject to the reporting and announcement requirements under Chapter 14A of theListing Rules, but does not require the approval by the independentShareholders of the Company under Chapter 14A of the Listing Rules. BOARD'S APPROVAL The seventeenth meeting of the eighth session of the Board of the Company hasapproved the transactions under the Entrusted Loan Contract. None of theDirectors has any material interests in the Entrusted Loan Contract. Thoseconnected Directors, namely Chen Jinhang, Hu Shengmu and Liang Yongpan (all ofwhom are the key management personnel of CDC), have abstained from voting forapproval of such resolution in accordance with the listing rules of theShanghai Stock Exchange. DEFINITIONS In this announcement, unless the context otherwise requires, the followingexpressions 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 "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 Hong Kong 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 "Datang Finance Company" Datang Corporation Finance Limited Company , a controlling subsidiary of CDC "Directors" the director(s) of the Company "Duolun Coal Chemical Datang Inner Mongolia Duolun Coal ChemicalCompany" Company Limited , a subsidiary of the Company, the details of which are set out in the section headed "Information on the Parties" "Energy and Chemical Datang Energy and Chemical Company Limited ,Company" a wholly-owned subsidiary of the Company "Entrusted Loan Arrangement" the arrangement where Datang Finance Company is entrusted by the Company to act as a lending agent to release the entrusted loan to Duolun Coal Chemical Company pursuant to the Entrusted Loan Contract "Entrusted Loan Contract" the entrusted loan contract entered into on 12 February 2015 between the Company, Datang Finance Company and Duolun Coal Chemical Company in respect of the Entrusted Loan Arrangement "Financial Services the financial services agreement entered intoAgreement" between the Company and Datang Finance Company on 15 October 2013, for particulars of which please refer to the Company's circular dated 5 November 2013 "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 Hong Kong 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 "PRC" the People's Republic of China "RMB" Renminbi, the lawful currency of the PRC "Shareholder(s)" the holder(s) of the Share(s) of the Company "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, 13 February 2015 As at the date of this announcement, the Directors of the Company are: Chen Jinhang, Hu Shengmu, Wu Jing, Liang Yongpan, Zhou Gang, Cao Xin,Cai Shuwen, Liu Haixia, Guan Tiangang, Yang Wenchun,Dong Heyi*, Ye Yansheng*, Zhao Jie*, Jiang Guohua*, Feng Genfu* * Independent non-executive Directors