Datang Intl H Regulatory News (DAT)

11 Jan 2006 07:00

Datang Intl Power Generation Co Ld11 January 2006 The Stock Exchange of Hong Kong Limited takes no responsibility for the contentsof this announcement, makes no representation as to its accuracy or completenessand expressly disclaims any liability whatsoever for any loss howsoever arisingfrom or in reliance upon the whole or any part of the contents of thisannouncement. 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 would like to announce that on 8 January 2006, the Company enteredinto the Investment Agreement with Hebei Investment for the purposes ofconstructing and operating the Wangtan Power Plant Project by establishingWangtan Power Company. Pursuant to the Investment Agreement, the Company andHebei Investment agreed to contribute to the registered capital of Wangtan PowerCompany in the proportion of 70% and 30%, respectively. Discloseable and Connected Transaction As at the date of the Investment Agreement, Hebei Investment owns approximately13.01% of the issued share capital of the Company, therefore Hebei Investment isa connected person of the Company under the Listing Rules. Accordingly, theInvestment Agreement constitutes a connected transaction for the Company underthe Listing Rules. As each of the percentage ratios (as defined in Rule 14.07 ofthe Listing Rules) is more than 2.5%, the Investment Agreement is subject toreporting, announcement and Independent Shareholders' approval requirementsunder Rule 14A.32 of the Listing Rules. Relevant details will also be includedin the next published annual report and accounts of the Company in accordancewith Rule 14A.45 of the Listing Rules. According to the Listing Rules, the Investment Agreement also constitutes adiscloseable transaction of the Company which is subject to the notification andpublication requirements as set out in Rules 14.34 to 14.39 of the ListingRules. A circular containing details of the Investment Agreement, together with anotice of the EGM, will be despatched to the Shareholders as soon aspracticable. INVESTMENT AGREEMENT Date 8 January 2006 Parties (i) the Company; and (ii) Hebei Investment. Major Terms Pursuant to the Investment Agreement, the Company and Hebei Investment agreed tocontribute to the registered capital of Wangtan Power Company in the proportionof 70% and 30%, respectively, for the purposes of constructing and operating theWangtan Power Plant Project. The total investment amount of the Wangtan Power Plant Project is expected to beapproximately RMB5,940,000,000 (equivalent to approximately HK$5,711,538,462),20% of which is the registered capital of Wangtan Power Company, i.e.RMB1,188,000,000 (equivalent to approximately HK$1,142,307,692). Pursuant to theInvestment Agreement, the Company and Hebei Investment will be responsible tocontribute in cash 70% (i.e. RMB831,600,000 (equivalent to approximatelyHK$799,615,385)) and 30% (i.e. RMB356,400,000 (equivalent to approximatelyHK$342,692,308)), respectively, of the registered capital of Wangtan PowerCompany and the payment terms of such contribution will be agreed between theparties to the Investment Agreement in accordance with the construction progressof the Wangtan Power Plant Project. The Investment Agreement does not stipulatea time limit within which both parties will contribute to the registered capitalof Wangtan Power Company. As at the date of this announcement, no contributionto the registered capital of Wangtan Power Company has been made by the partiesto the Investment Agreement. The Company's contribution to the registeredcapital of Wangtan Power Company will be funded by internal resources. According to the Investment Agreement, all funds required for the constructionof the Wangtan Power Plant Project will be funded by the registered capital ofWangtan Power Company and third party borrowings in the PRC and in which case,each of the Company and Hebei Investment will severally guarantee suchborrowings in proportion to their respective capital contribution in WangtanPower Company if so required. In the event of any further capital contributionor guarantee of borrowings by the Company, it will comply with the relevantrequirements under the Listing Rules if and when necessary. The Investment Agreement will become effective when the respective party to theInvestment Agreement has obtained their internal approvals for the investmentsunder the Investment Agreement which, apart from the approval by the IndependentShareholders pursuant to the Listing Rules, have all been obtained as at thedate of this announcement. The Wangtan Power Plant Project has been approved bythe National Development and Reform Commission in the PRC and the applicationfor the business license of Wangtan Power Company is in process. The Investment Agreement has no long-stop date and upon the establishment ofWangtan Power Company, it will become a subsidiary of the Company. INFORMATION RELATING TO THE COMPANY The Company is principally engaged in the development and operation of powerplants, the sale of electricity and thermal power, and the repair, testing andmaintenance of power equipment and power related technical services, with itspresent main operation in the PRC. INFORMATION RELATING TO HEBEI INVESTMENT The principal business of Hebei Investment includes the development ofinvestment businesses, provision of security and guarantee to enterprises andinvesting in and management of energy, transportation and communicationsprojects. INFORMATION RELATING TO THE WANGTAN POWER PLANT PROJECT The Wangtan Power Plant Project, consisting of two 600 MW coal-fired powergenerating units, is located in the Tangshan Seaport Development Zone, Tangshan,Hebei Province, the PRC, in which abundant coal resources is found. The WangtanPower Plant Project has been approved by the National Development and ReformCommission of the PRC in 2005 and pre-construction work has been undertaken bythe Company. Through negotiations during the pre-construction stage of theWangtan Power Plant Project, the Company and Hebei Investment agreed as to thedetails of the cooperation in the project and accordingly entered into theInvestment Agreement. Pursuant to the Investment Agreement, Hebei Investment hasagreed to reimburse the Company for all expenses it incurred in the pre-construction stage of the project in the proportion of its investment in WangtanPower Company. The Wangtan Power Plant Project is now in its testing stage. REASONS FOR AND BENEFITS OF THE ENTERING INTO OF THE INVESTMENT AGREEMENT The Wangtan Power Plant Project is constructed in the Hebei Province and theelectricity generated by the coal-fire generating units constructed pursuant tosuch project will be sold in full to the BTT Power Grid. The Company believesthat the power generating units constructed in the Wangtan Power Plant Projectcould take advantage of the growing demand for electricity in the BTT area,which in turn would enhance the operating profits of the Company as a whole. TheCompany also believes that the participation in the Wangtan Power Plant Projectwith Hebei Investment will enable the Company to spread its risks associatedwith the project and allow the Company to diversify its resources into otherviable projects. In view of the above, the Directors believe that the terms ofthe Investment Agreement are fair and reasonable and in the interests of theShareholders as a whole. DISCLOSEABLE AND CONNECTED TRANSACTION As at the date of the Investment Agreement, Hebei Investment owns approximately13.01% of the issued share capital of the Company, therefore Hebei Investment isa connected person of the Company under the Listing Rules. Accordingly, theInvestment Agreement constitutes a connected transaction for the Company underthe Listing Rules. As each of the percentage ratios (as defined in Rule 14.07 ofthe Listing Rules) is more than 2.5%, the Investment Agreement is subject toreporting, announcement and Independent Shareholders' approval requirementsunder Rule 14A.32 of the Listing Rules. Relevant details will also be includedin the next published annual report and accounts of the Company in accordancewith Rule 14A.45 of the Listing Rules. According to the Listing Rules, the Investment Agreement also constitutes adiscloseable transaction of the Company which is subject to the notification andpublication requirements as set out in Rules 14.34 to 14.39 of the ListingRules. Hebei Investment and its Associates will abstain from voting on the resolutionto approve the Investment Agreement at the EGM. INDEPENDENT BOARD COMMITTEE AND INDEPENDENT FINANCIAL ADVISOR An Independent Board Committee will be appointed to advise the IndependentShareholders on the terms of the Investment Agreement. An independent financialadvisor will be appointed to advise the Independent Board Committee and theIndependent Shareholders on the terms of the Investment Agreement. DESPATCH OF CIRCULAR A circular containing, among other things, further information on the InvestmentAgreement, together with a notice of the EGM, will be despatched to theShareholders as soon as practicable. DEFINITIONS In this announcement, the following expressions have the meanings set out belowunless the context otherwise requires: In this announcement, the following expressions have the meanings set out below unless the context otherwise requires: "Associate(s)" has the meaning ascribed to it under the Listing Rules "Board" the board of Directors "BTT" means Beijing-Tianjin-Tangshan "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 are listed on the Stock Exchange and the London Stock Exchange "connected person" has the meaning ascribed to it in the Listing Rules "Director(s)" the director(s) of the Company "Domestic Shares" ordinary shares issued by the Company, with a nominal value of RMB1.00 each, which are subscribed for or credited as paid up in Renminbi "EGM" the extraordinary general meeting of the Company to be held to consider and, if thought fit, to approve the Investment Agreement "H Shares" the overseas listed foreign shares of the Company with a nominal value of RMB1.00 each and are listed on the Stock Exchange and the London Stock Exchange "Hebei Investment" Hebei Construction Investment Company (Chinese Characters), a state-owned enterprise established under the laws of the PRC and is a substantial shareholder of the Company holding approximately 13.01% of the issued share capital of the Company as at the date of the Investment Agreement "HK$" Hong Kong dollar(s), the lawful currency of Hong Kong "Hong Kong" the Hong Kong Special Administrative Region of the PRC "Independent Board Committee" the independent board committee of the Board, comprising five independent non-executive Directors, namely Mr. Xie Songlin, Mr. Xu Daping, Mr. Liu Chaoan, Mr. Yu Changchun and Mr. Xia Qing "Independent Shareholders" Shareholders other than Hebei Investment and its Associates "Investment Agreement" the investment agreement in relation to the Hebei Wangtan Power Plant Project dated 8 January 2006 entered into between the Company and Hebei Investment "Listing Rules" Rules Governing the Listing of Securities on the Stock Exchange "London Stock Exchange" The London Stock Exchange Limited "MW" Megawatts "PRC" the People's Republic of China "RMB" Renminbi, the lawful currency of the PRC "Share(s)" the ordinary share(s) of the Company with a nominal value of RMB1.00 each, comprising Domestic Shares and H Shares "Shareholder(s)" the holder(s) of the Share(s) "Stock Exchange" The Stock Exchange of Hong Kong Limited "Wangtan Power Company" Hebei Datang International Wangtan Power Co., Ltd. (Chinese Characters) "Wangtan Power Plant Project" Hebei Wangtan Power Plant Project (Chinese Characters) which consists of two 600MW coal-fired power generating units "%" per cent. By Order of the Board Yang Hongming Company Secretary Beijing, the PRC, 10 January 2006 As at the date of this announcement, the Directors are: Zhai Ruoyu, Zhang Yi, Hu Shengmu, Fang Qinghai, Yang Hongming, Liu Haixia, GuanTiangang, Su Tiegang, Ye Yonghui, Tong Yunshang, Xie Songlin*, Xu Daping*, LiuChaoan*, Yu Changchun* and Xia Qing* * independent non-executive Directors For the purpose of this announcement, HK$1.00 is equivalent to RMB1.04. This information is provided by RNS The company news service from the London Stock Exchange