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 PROPERTY TRANSACTION AGREEMENT On 27 October 2014, Ganzi Hydropower, a subsidiary of the Company, entered intothe Property Transaction Agreement with Kangding Guoneng, a wholly-ownedsubsidiary of CDC. According to the agreement, Ganzi Hydropower agreed toacquire from Kangding Guoneng the 100% equity interest in Kangding Hydropowerheld by Kangding Guoneng at the consideration of RMB53.5666 million. LISTING RULES IMPLICATIONS As at the date of this announcement, CDC is the controlling shareholder of theCompany, which together with its subsidiaries hold 34.71% of the issued sharecapital of the Company. Kangding Guoneng is a wholly-owned subsidiary of CDCand is therefore a connected person of the Company under the Listing Rules. TheProperty Transaction Agreement and the transaction contemplated thereunderconstitute a connected transaction of the Company. As one or more of the applicable percentage ratios (as defined in Rule 14.07 ofthe Listing Rules) in respect of the transaction under the Property TransactionAgreement is higher than 0.1% but lower than 5% and all other applicablepercentage ratios are less than 0.1%, such transaction is only subject to thereporting and announcement requirements under Chapter 14A of the Listing Rulesand does not require the approval by the independent shareholders of theCompany under Chapter 14A of the Listing Rules. PROPERTY TRANSACTION AGREEMENT Date 27 October 2014 Parties to the Agreement Transferor: Kangding GuonengTransferee: Ganzi Hydropower Main contents of the Agreement 1. Subject of transfer: 100% equity interest in Kangding Hydropower 2. Consideration: According to the asset valuation report (Zhong He Ping Bao Zi (2014) No.BJV3028D001) issued by Zhong He Appraisal Company Limited, an independentvaluer, by adopting the asset-based approach as at 31 December 2013, thevaluation benchmark date, the appraised value of Kangding Hydropower aftervaluation was RMB53.5666 million and the transaction price for the 100% equityinterest in Kangding Hydropower under the Property Transaction Agreement wasRMB53.5666 million . 3. Principle for determination of consideration: Ganzi Hydropower agreed to acquire 100% equity interest in Kangding Hydropowerfrom Kangding Guoneng at the consideration of RMB53.5666 million. The saidconsideration is the same as the price of the equity interest as quoted in TheShanghai Assets and Equity Exchange. The quoted price for such equity interestwas determined according to the valuation of the net assets value of the equityinterest, with 31 December 2013 as the valuation benchmark date, conducted byan independent valuer. 4. Terms of payment: Ganzi Hydropower shall settle the balance of consideration (after deducting theDeposit, i.e., RMB38.566 million) in one lump sum payment by transferring thesaid to a clearing account designated by The Shanghai Assets and EquityExchange within 5 working days after the execution of the Property TransactionAgreement. Prior to the execution of the Property Transaction Agreement, GanziHydropower had paid the Deposit of RMB15 million to The Shanghai Asset andEquity Exchange. After the Property Transaction Agreement becoming effective,the Deposit will serve as part of the consideration to fulfill the paymentobligations of Ganzi Hydropower under the Property Transaction Agreement. 5. Other arrangements for the transaction: i. The existing labour contracts of the employees of Kangding Hydropower would still be carried out by Kangding Hydropower after completion of the transaction under the Property Transaction Agreement; ii. All existing claims and liabilities of Kangding Hydropower will still be borne by Kangding Hydropower after completion of the transaction under the Property Transaction Agreement; iii. All profits and losses related to Kangding Hydropower from 31 December 2013 to the date of completion of the transaction will be borne by Ganzi Hydropower. Condition The Property Transaction Agreement is subject to the satisfaction of thecondition that all parties to the agreement have signed the PropertyTransaction Agreement or their respective common seals have been affixedtherein. DETAILS OF THE EQUITY INTEREST PROPOSED TO BE ACQUIRED Kangding Hydropower was established in September 2005 with a registered capitalof RMB18.29 million, and its 100% equity interest is held by Kangding Guoneng.Kangding Hydropower owns and operates 2×8MW hydropower units, responsible forproviding power supply to the construction of Changheba Hydropower Station andHuangjinping Hydropower Station of Ganzi Hydropower, a subsidiary of theCompany. As at 30 June 2014, the total assets, the liabilities and the owner's equity ofKangding Hydropower were RMB70.6076 million, RMB18.0038 million and RMB52.6038million respectively. The realised net profit for the period between Januaryand June of 2014 was RMB5.7636 million. (Figures stated in this paragraph areunaudited). The net profit of Kangding Hydropower before and after taxation for thefinancial year ended 31 December 2012 were RMB27.0063 million and RMB20.2525million, respectively. The net profit of Kangding Hydropower before and aftertaxation for the financial year ended 31 December 2013 were RMB36.0196 millionand RMB27.0147 million, respectively. Kangding Hydropower will become a wholly-owned subsidiary of Ganzi Hydropowerupon completion of the equity transfer. REASONS FOR AND BENEFITS OF ENTERING INTO THE PROPERTY TRANSACTION AGREEMENT As Changheba Hydropower Station and Huangjinping Hydropower Station of GanziHydropower are currently under construction, Kangding Hydropower provides partof the electric power it generates to support the construction of both. Theacquisition is able to smooth the management relationship and guarantee thesmooth development of construction projects of Ganzi Hydropower. Besides,Kangding Hydropower is currently equipped with hydropower units of a capacityof 16MW installed, the acquisition will increase the Company's installedcapacity of hydropower and meanwhile expand its size of generating units inservice. The Directors, including independent non-executive directors, are of the viewthat the acquisition of the equity interest under the Property TransactionAgreement is entered into based on normal commercial terms, and the relatedtransaction is fair and reasonable and is in the interest of shareholders ofthe Company as a whole. APPROVAL BY THE BOARD No Director is materially interested in the transaction. Connected Directors,including Chen Jinhang, Hu Shengmu and Fang Qinghai are key members of themanagement of CDC, and they have all abstained from voting on the relevantresolution approving the transaction in the Board meeting according to theRules Governing the Listing of Stocks on the Shanghai Stock Exchange. INFORMATION OF THE PARTIES Information of the Company The Company is principally engaged in the construction and operation of powerplants, the sale of electricity and thermal power, the repair and maintenanceof power equipment and power related technical services, with its main servicearea being in PRC. Information of CDC CDC was established on 9 March 2003 with a registered capital of RMB18.009billion. It is principally engaged in the development, investment,construction, operation and management of power energy, organisation of power(thermal) production and sales; manufacture, repair and maintenance of powerequipment; power technology development and consultation; power engineering,contracting and consultation of environmental power engineering; development ofnew energy as well as development and production of power related coalresources. Information of Kangding Guoneng Kangding Guoneng was incorporated in January 2007 in Kangding County, GanziPrefecture, Sichuan, and is a wholly-owned subsidiary of CDC. It is principallyengaged in the investment in electricity and energy projects, investment inmineral resources development, investment in transportation, water conservationand environmental protection infrastructure projects, etc., with an existingregistered capital of RMB143, 055,000. Information of Ganzi Hydropower Ganzi Hydropower was established in July 2006 with a registered capital ofRMB1,625,063,300. The company is held by three shareholders, of which: 52.50%is owned by the Company, 46.88% is owned by CDC, and 0.62% is owned by GanziCounty Gantou Hydropower Development Company Limited. LISTING RULES IMPLICATIONS As at the date of this announcement, CDC is the controlling shareholder of theCompany, which together with its subsidiaries hold 34.71% of the issued sharecapital of the Company. Kangding Guoneng is a wholly-owned subsidiary of CDCand is therefore a connected person of the Company under the Listing Rules. TheProperty Transaction Agreement and the transaction contemplated thereunderconstitute a connected transaction of the Company. As one or more of the applicable percentage ratios (as defined in Rule 14.07 ofthe Listing Rules) in respect of the transaction under the Property TransactionAgreement is higher than 0.1% but lower than 5% and all other applicablepercentage ratios are less than 0.1%, such transaction is only subject to thereporting and announcement requirements under Chapter 14A of the Listing Rulesand does not require the approval by the independent shareholders of theCompany under Chapter 14A of the Listing Rules. DEFINITIONS In this announcement, unless the context otherwise requires, the followingexpressions have the following meanings: "Board" the board of Directors "CDC" China Datang Corporation, a State-owned enterprise established under the laws of the PRC and is the controlling Shareholder of the Company under the Listing Rules "Company" Datang International Power Generation Company Limited, 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 "Deposit" a deposit of RMB15 million paid by the transferee to the designated account of The Shanghai Assets and Equity Exchange before the entering of the Property Transaction Agreement at the request of the transferor and The Shanghai Assets and Equity Exchange, which is to serve as the guarantee for the intention to accept the transfer of the transferee, and to demonstrate its assets and credit position and the ability to fulfill the obligations under the Property Transaction Agreement "Ganzi Hydropower" Sichuan Datang International Ganzi Hydropower Generation Development Company Limited, as at the date of this announcement, the Company holds 52.50% of its equity interests "Kangding Guoneng" Kangding Guoneng Investment Company Limited, the details of which is set out in the section headed "INFORMATION OF THE PARTIES" "Kangding Hydropower" Kangding Guoneng Hydropower Generation Development Company Limited, the details of which is set out in the section headed "INFORMATION OF THE PARTIES" "Listing Rules" the Rules Governing the Listing of Securities on the Hong Kong Stock Exchange "MW" megawatt "PRC" the People's Republic of China "Property Transaction Agreement" the "Property Transaction Agreement" entered into by Ganzi Hydropower and Kangding Guoneng on 27 October 2014 in relation to the transfer of 100% equity interest of Kangding Hydropower "RMB" Renminbi, the lawful currency of the PRC "Shareholder(s)" the shareholders of the Company "Stock Exchange" The Stock Exchange of Hong Kong Limited "The Shanghai Assets and Equity The Shanghai United Assets and EquityExchange" Exchange "%" percent By Order of the Board Zhou Gang Secretary to the Board Beijing, the PRC, 28 October 2014 As at the date of this announcement, the Directors are: Chen Jinhang, Hu Shengmu, Wu Jing, Fang Qinghai, 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