Datang Intl H Regulatory News (DAT)

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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 CAPACITY AND EFFICIENCY ENHANCEMENT AND MODIFICATION CONTRACT Pursuant to the "Resolution on the Increase in the Tendering Amount of Datang International and itsSubsidiaries for Technological Transformation Projects" as considered and approved by the fifteenthmeeting of the eighth session of the Board on 30 October 2014 (the details of which were set out inthe overseas regulatory announcement of the Company dated 30 October 2014), the public tender for thetechnological transformation work on desulfurisation and capacity and efficiency enhancement for generationunits No. 1 and 8 of Zhangjiakou Power Plant was conducted. According to the result of the tender, on 10December 2014, Zhangjiakou Power Plant and Datang Technology Industry Company, a wholly-owned subsidiary ofCDC, entered into the Capacity and Efficiency Enhancement and Modification Contract, with the aggregate contractamount of approximately RMB198 million. LISTING RULES IMPLICATIONS As at the date of this announcement, CDC is the controlling Shareholder of the Company, which together with itssubsidiaries holds 34.71% of the issued share capital of the Company. Pursuant to Chapter 14A of the ListingRules, since Datang Technology Industry Company, a wholly-owned subsidiary of CDC, is a connected person ofthe Company, the transaction under the Capacity and Efficiency Enhancement and Modification Contract constitutesa connected transaction of the Company. As one or more of the applicable percentage ratios (as defined under Rule 14.07 of the Listing Rules) in respectof the aggregated transaction amount under the "Capacity and Efficiency Enhancement and Modification Contract",the "General EPC Contract for Transformation Project for the Electric Dust Wipers of Boilers No. 1 and 4 of 300MWPower Generating Units No. 1 and 4 of Zhangjiakou Power Plant" and the "General EPC Contract for TransformationProject for the Electric Dust Wipers of Boilers No. 3 and 7 of 300MW Power Generating Units No. 3 and 7 ofZhangjiakou Power Plant" is more than 0.1% but less than 5%, the Capacity and Efficiency Enhancement and ModificationContract and the transaction thereunder are subject to the reporting and announcement requirements under Chapter 14Aof the Listing Rules but do not require the approval by the independent Shareholders of the Company. CAPACITY AND EFFICIENCY ENHANCEMENT AND MODIFICATION CONTRACT Pursuant to the "Resolution on the Increase in the Tendering Amount of Datang International and its Subsidiariesfor Technological Transformation Projects" as considered and approved by the fifteenth meeting of the eighth sessionof the Board on 30 October 2014 (the details of which were set out in the overseas regulatory announcement of theCompany dated 30 October 2014), the public tender for the technological transformation work on desulfurisationand capacity and efficiency enhancement for Zhangjiakou Power Plant units No. 1 and 8 was conducted. Accordingto the result of the tender, on 10 December 2014, Zhangjiakou Power Plant and Datang Technology Industry Company,a wholly-owned subsidiary of CDC, entered into the Capacity and Efficiency Enhancement and Modification Contract,with the aggregate contract amount of approximately RMB198 million. Date of contract 10 December 2014 Parties 1. Zhangjiakou Power Plant; and 2. Datang Technology Industry Company. Major terms of the contract 1. Subject matter: Zhangjiakou Power Plant agreed to appoint Datang Technology Industry Company to carry out the technological transformation project on the capacity and efficiency enhancement of the flue gas desulfurisation system of unit No. 1 and 8 of Zhangjiakou Power Plant. 2. Scope of the contract: Datang Technology Industry Company agreed to provide services including the design, optimisation, supply, construction, supervision, debugging, testing, provision of on-site services, preparation of tender materials of all equipment and materials , the supply and installation of absorber tower and anti-corrosive flue pipes, the supply of anti-corrosive pipes, tanks and cans, and the supply and construction of anti-corrosive materials. 3. Contract price and breakdown: Breakdown of the total contract price Total contract Total Total Total price Total facilities consideration for consideration for consideration for (RMB'000) costs construction work installation work technical services (RMB'000) (RMB'000) (RMB'000) (RMB'000) 198,000 76,781.2 29,753.889 70,739.744 20,725.167 4. Settlement and payment: Within two weeks from the effective date of the contract, Datang Technology Industry Company shall submit a financial receipt with an amount equivalent to 100% of the total contract price to Zhangjiakou Power Plant. Within two weeks upon verification, Zhangjiakou Power Plant shall pay 90% of the total contract price, i.e., RMB178,200,000 to Datang Technology Industry Company as the project fee by way of cash transfer. The remaining project fee of 10% of the total contract price i.e., RMB19,800,000 shall be regarded as warranty for quality that shall be paid by way of cash transfer after the end of the warranty period. 5. Warranty period: One-year warranty period starting from the day of passing the performance test. One-year warranty period for each power generating unit. 6. The Capacity and Efficiency Enhancement and Modification Contract shall become effective when it is duly signed by the legal representative or the proxy (with written authorisation by the legal representative) of the parties with their respective company seals affixed thereto. REASONS FOR AND BENEFITS OF ENTERING INTO THE CAPACITY AND EFFICIENCY ENHANCEMENT AND MODIFICATION CONTRACT According to the annual technological transformation plan of the Company, the Company invited public tender forthe project on the capacity and efficiency enhancement and modification for the power generating units of itspower plants. After carrying out relevant evaluation procedures and considering various factors, including thefee quotation, technical experiences, professional qualification, business reputation, project management skills,consideration amount and other relevant factors of all the tenderers, Datang Technology Industry Company, aprofessional company, was selected as the tender winner for the project on the capacity and efficiency enhancementand modification for the generation units of Zhangjiakou Power Plant. Datang Technology Industry Company possesses sufficient qualification with rich expertise in carrying out the capacityand efficiency enhancement and modification for the power generating units. The Company considers that DatangTechnology Industry Company will be capable to ensure the capacity and efficiency enhancement and modificationto be carried out smoothly. The Company and Zhangjiakou Power Plant agreed to appoint Datang Technology Industry Company to carry out the capacityand efficiency enhancement and modification, mainly for the purposes of ensuring the on-schedule completion of thecapacity and efficiency enhancement and modification of the Zhangjiakou Power Plant, to fully ride on its professionaladvantage, as well as to control cost to a certain extent through large scale purchasing of facilities. The Directors (including independent non-executive Directors) are of the view that the transactions under the Capacityand Efficiency Enhancement and Modification Contract were determined by way of public tender; the relevant terms arefair and reasonable and conducted on normal commercial terms and are in the interests of the Company and itsshareholders as a whole. BOARD'S APPROVAL None of the Directors has material interest in the transactions under the Capacity and Efficiency Enhancement andModification Contract. Connected Directors, including Chen Jinhang,Hu Shengmu and Liang Yongpan, have abstained from voting for this resolution at the relevant Board meeting pursuantto the listing rules of the Shanghai Stock Exchange. INFORMATION RELATING TO THE PARTIES OF THE CONTRACT 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 being in the PRC. 2. Zhangjiakou Power Plant is a power plant owned by the Company. It currently has eight 300MW coal-fired generation units (2,400MW in total) and the assets of compatible desulfurisation facilities. The power generated mainly supplies the Beijing-Tianjin-Tangshan power grid. 3. CDC was established on 9 March 2003 with registered capital of RMB18,009 million and is principally engaged in the development, investment, construction, operation and management of power energy, organisation 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. 4. Datang Technology Industry Company is a wholly-owned subsidiary of CDC with a registered capital of RMB550 million. The company is the major platform for the development of the technology business segment of CDC and is responsible for the implementation of the development strategy and plan for the technology business of CDC. LISTING RULES IMPLICATIONS As at the date of this announcement, CDC is the controlling Shareholder of the Company, which together with itssubsidiaries holds 34.71% of the issued share capital of the Company. Pursuant to Chapter 14A of the Listing Rules,since Datang Technology Industry Company, a wholly-owned subsidiary of CDC, is a connected person of the Company,the transaction under the Capacity and Efficiency Enhancement and Modification Contract constitutes a connectedtransaction of the Company. As one or more of the applicable percentage ratios (as defined under Rule 14.07 of the Listing Rules) in respect ofthe aggregated transaction amount under the "Capacity and Efficiency Enhancement and Modification Contract", the"General EPC Contract for Transformation Project for the Electric Dust Wipers of Boilers No. 1 and 4 of 300MW PowerGenerating Units No. 1 and 4 of Zhangjiakou Power Plant" and the "General EPC Contract for Transformation Project forthe Electric Dust Wipers of Boilers No. 3 and 7 of 300MW Power Generating Units No. 3 and 7 of Zhangjiakou Power Plant"is more than 0.1% but less than 5%, the Capacity and Efficiency Enhancement and Modification Contract and thetransactions thereunder are subject to the reporting and announcement requirements under Chapter 14A of the ListingRules but do not require the approval by the independent Shareholders of the Company. DEFINITIONS In this announcement, unless the context otherwise requires, the following expressions have the following meanings: "Board" the board of Directors "Capacity and Efficiency the "Contract on Desulphurisation and Capacity and Efficiency Enhancement andEnhancement and Modification Modification of Zhangjiakou Power Plant Units No. 1 and 8" entered into byContract" Zhangjiakou Power Plant and Datang Technology Industry Company on 10 December 2014 "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 Engineering Company" China Datang Technologies and Engineering Co., Ltd., a subsidiary of Datang Technology Industry Company Limited, a wholly-owned subsidiary of CDC "Datang Technology Industry Datang Technology Industry Company Limited, a wholly-owned subsidiary of CDC.Company" For more information, please refer to the section headed "INFORMATION OF THE PARTIES" "Director(s)" the director(s) of the Company "General EPC Contract for the general EPC contract for transformation project for the electric dust wipers ofTransformation Project for the boilers No. 1 and 4 of 300MW power generating units No. 1 and 4 of Zhangjiakou PowerElectric Dust Wipers of Boilers Plant entered into between entered into between Zhangjiakou Power Plant and DatangNo.1 and 4 of 300MW Power Engineering Company on 20 March 2014, details of which were set out in the connectedGenerating Units No. 1 and 4 transaction announcement of the Company dated 27 August 2014of Zhangjiakou Power Plant" "General EPC Contract for the general EPC contract for transformation project for the electric dust wipers ofTransformation Project for boilers No. 3 and 7 of 300MW Power Generating Units No. 3 and 7 of Zhangjiakou Powerthe Electric Dust Wipers of Plant entered into between Zhangjiakou Power Plant and Datang Engineering CompanyBoilers No. 3 and 7 of 300MW in April 2014,details of which were set out in the connected transaction announcementPower Generating Units No. 3 of the Company dated 27 August 2014and 7 of Zhangjiakou PowerPlant" "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 "Stock Exchange" The Stock Exchange of Hong Kong Limited "Zhangjiakou Power Plant" Datang International Power Generation Company Limited Zhangjiakou Power Plant, a power plant owned and directly managed by the Company. For more information, please refer to the section headed "INFORMATION OF THE PARTIES" "%" percent By Order of the Board Zhou Gang Secretary to the Board Beijing, the PRC, 10 December 2014 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