Datang Intl H Regulatory News (DAT)

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take noresponsibility for the contents of this announcement, make no representation as to itsaccuracy or completeness and expressly disclaim any liability whatsoever for any losshowsoever arising from 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: 00991) ANNOUNCEMENT CONTINUING CONNECTED TRANSACTIONS ANNUAL SHIPPING FRAMEWORK AGREEMENTS On 7 January 2015, Shipping Company entered into the Annual Shipping Framework Agreementswith Lvsigang Power Generation Company and Chaozhou Power Generation Company, respectively,to carry out the following continuing connected transactions: (1) Shipping Company and Lvsigang Power Generation Company entered into the Lvsigang Shipping Framework Agreement, pursuant to which Shipping Company agreed to provide coal transportation service to Lvsigang Power Generation Company with a maximum aggregate annual transaction amount of approximately RMB83 million for a term of one year commencing from 1 January 2015 to 31 December 2015. (2) Shipping Company and Chaozhou Power Generation Company entered into the Chaozhou Shipping Framework Agreement, pursuant to which Shipping Company agreed to provide coal transportation service to Chaozhou Power Generation Company with a maximum aggregate annual transaction amount of approximately RMB189 million for a term of one year commencing from 1 January 2015 to 31 December 2015. LISTING RULES IMPLICATIONS As at the date of this announcement, CDC is the controlling shareholder of the Company, whichtogether with its subsidiaries hold approximately 34.71% of the issued share capital of theCompany. Since CDC and its subsidiaries hold certain equity interests in Lvsigang PowerGeneration Company and Chaozhou Power Generation Company, therefore Lvsigang Power GenerationCompany and Chaozhou Power Generation Company are connected persons of the Company. Thetransactions contemplated under the Lvsigang Shipping Framework Agreement and the ChaozhouShipping Framework Agreement constitute continuing connected transactions of the Company. Since one or more of the applicable percentage ratios (as defined under Rule14.07 of theListing Rules) in respect of the transaction amounts under each of the Lvsigang ShippingFramework Agreement and the Chaozhou Shipping Framework Agreement are higher than 0.1% butall the applicable percentage ratios are less than 5%, the transactions contemplated undereach of the Lvsigang Shipping Framework Agreement and the Chaozhou Shipping FrameworkAgreement respectively are only subject to the annual review, reporting and announcementrequirements, but do not require the approval by the independent shareholders of the Companyunder Chapter 14A of the Listing Rules. ANNUAL SHIPPING FRAMEWORK AGREEMENTS Lvsigang Shipping Framework Agreement Date: 7 January 2015 Parties: Shipping Company, Lvsigang Power Generation Company Chaozhou Shipping Framework Agreement Date: 7 January 2015 Parties: Shipping Company, Chaozhou Power Generation Company The terms of Lvsigang Shipping Framework Agreement and the Chaozhou Shipping FrameworkAgreement are substantially the same, the major terms of which are as follows: (1) Subject matter: Shipping Company agreed to provide coal transportation service to each of Lvsigang Power Generation Company and Chaozhou Power Generation Company during the term of the agreement. The parties may, from time to time during the term of the agreement, enter into specific transportation contracts in respect of the coal transportation services provided by Shipping Company provided that such specific contracts shall be subject to the terms of the Annual Shipping Framework Agreements. (2) Consideration: To be determined in the ordinary course of business on normal commercial terms on the basis of arm's length negotiation according to prevailing market conditions. (3) Settlement and payment: Settlement shall be made by the relevant parties in accordance with the confirmed settlement invoice. (4) Term: One year, commencing from 1 January 2015 to 31 December 2015. The Company confirms that each of the applicable percentage ratios (as defined under Rule 14.07 of the Listing Rules) in respect of the transaction amount under each of the Lvsigang Shipping Framework Agreement and the Chaozhou Shipping Framework Agreement for the period between 1 January 2015 and the date of this announcement does not exceed the de minimis threshold under Chapter 14A of the Listing Rules.. (5) The Annual Shipping Framework Agreements become effective when they are duly signed by all parties. Annual cap and pricing policy It is expected that the maximum transaction amount in respect of the Lvsigang ShippingFramework Agreement for the year ending 31 December 2015 is RMB83 million; and it is expectedthat the maximum transaction amount in respect of the Chaozhou Shipping Framework Agreementfor the year ending 31 December 2015 is RMB189 million; such amounts are determined withreference to (i) the anticipated quantity of coal to be transported by Shipping Company forLvsigang Power Generation Company and Chaozhou Power Generation Company for the year ending31 December 2015; and (ii) the estimated market price of coal transportation. As set out in earlier section of this announcement, the consideration for the provision ofthe coal transportation service under the Annual Shipping Framework Agreements is to bedetermined on normal commercial terms on the basis of arm's length negotiation according toprevailing market conditions. The Company has also taken into account the following factorsin determination of the consideration: (1) Transportation costs of Shipping Company, including fuel costs, depreciation of vessels, financial costs, rental of the crew, port charges, management fee, cost of moisturising materials, repairing costs, insurance expenses, husbandage, business tax and other expenses. (2) Coal transportation costs in market, which are collected by professional departments of the Company as a reference for determination of pricing. (3) The coal transportation price for 2015 is determined by monthly work meeting and fuel management team meeting of the Company, after considering the overall transportation cost of Shipping Company, anticipated quantity of coal demand of Lvsigang Power Generation Company and Chaozhou Power Generation Company, the historical prices of the abovementioned power generation companies and Shipping Company, potential price fluctuation and suggestions from professional departments. It is anticipated that there will be an increase in the quantity of coal used for powergeneration, as well as an increase in the quantity of imported coal to be purchased byChaozhou Power Generation Company, for the year ending 31 December 2015, and based on theresults of negotiation between the parties, it is expected that the annual cap for the yearending 31 December 2015 will be substantially higher than the historical transaction amount. Historical transaction amounts From 1 January 2014 to 15 November 2014, the fee of coal transportation service provided byShipping Company to Lvsigang Power Generation Company was RMB61 million. From 1 January 2014 to 15 November 2014, the fee of coal transportation service provided byShipping Company to Chaozhou Power Generation Company was RMB91 million. For the year ended 31 December 2013, the fee of coal transportation service provided byShipping Company to Lvsigang Power Generation Company was RMB83 million. For the year ended 31 December 2013, the fee of coal transportation service provided byShipping Company to Chaozhou Power Generation Company was RMB89 million. For the year ended 31 December 2012, the Shipping Company did not conduct any relevanttransaction with Lvsigang Power Generation Company and Chaozhou Power Generation Company. REASONS FOR AND BENEFITS OF ENTERING INTO THE ANNUAL SHIPPING FRAMEWORK AGREEMENTS The provision of fuel transportation service by Shipping Company to Lvsigang Power GenerationCompany and Chaozhou Power Generation Company ensures the fuel supply to the coastal powergeneration enterprises of the Company since Shipping Company can arrange transportation in amore timely and rapid manner according to the fuel demand from the power generationenterprises of the Company. The Directors (including the views of the independent non-executive Directors) are of theview that the terms of the Annual Shipping Framework Agreements are fair and reasonable, havebeen entered into after arm's length negotiation between all parties thereto and determinedon normal commercial terms and is in the interests of the Company and the shareholders as awhole. INFORMATION ON THE PARTIES TO THE AGREEMENTS 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. The Company's main service areas are in the PRC. 2. CDC was established on 9 March 2003 with registered capital of RMB18.009 billion. 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 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. 3. Lvsigang Power Generation Company is a subsidiary of the Company. It is currently operating four 660MW coal-fired generating units. The equity holding structure of the company is as follows: 55% of its equity interest is held by the Company, 35% of its equity interest is held by CDC and 10% of its equity interest is held by Nantong State-owned Assets Investment Holdings Co., Ltd. 4. Chaozhou Power Generation Company is a subsidiary of the Company. It is currently operating two 600MW and two 1,000MW coal-fired generating units. The equity holding structure of the company is as follows: 52.5% of its equity interest is held by the Company, 22.5% of its equity interest is held by CDC and 25% of its equity is held by other shareholders. 5. Shipping Company is a subsidiary of the Company. It is principally engaged in ordinary freight transportation along domestic coast, mid to down-stream of the Yangtze River and in the Pearl River Delta; international freight transportation; vessel leasing, freight agency, freight storage, etc. The equity holding structure of the company is as follows: 98.11% of its equity interest is held by the Company and 1.89% of its equity interest is held by other shareholders. LISTING RULES IMPLICATIONS As at the date of this announcement, CDC is the controlling shareholder of the Company, whichtogether with its subsidiaries hold approximately 34.71% of the issued share capital of theCompany. Since CDC and its subsidiaries hold certain equity interests in Lvsigang PowerGeneration Company and Chaozhou Power Generation Company, therefore Lvsigang Power GenerationCompany and Chaozhou Power Generation Company are connected persons of the Company. Thetransactions contemplated under the Lvsigang Shipping Framework Agreement and the ChaozhouShipping Framework Agreement constitute continuing connected transactions of the Company. Since one or more of the applicable percentage ratios (as defined under Rule14.07 of theListing Rules) in respect of the transaction amounts under each of the Lvsigang ShippingFramework Agreement and the Chaozhou Shipping Framework Agreement are higher than 0.1% butall the applicable percentage ratios are less than5%, the transactions contemplated undereach of the Lvsigang Shipping Framework Agreement and the Chaozhou Shipping FrameworkAgreement respectively are only subject to the annual review, reporting and announcementrequirements, but do not require the approval by the independent shareholders of the Companyunder Chapter 14A of the Listing Rules. None of the Directors has material interest in the Annual Shipping Framework Agreements.Those connected Directors, including Chen Jinhang, Hu Shengmu and Liang Yongpan, haveabstained from voting at the Board meeting for approval of the relevant transactions inaccordance with the requirements of the Listing Rules of the Shanghai Stock Exchange. DEFINITIONS In this announcement, unless the context otherwise requires, the following expressions havethe following meanings: "Annual Shipping Framework Agreements" Lvsigang Shipping Framework Agreement and Chaozhou Shipping Framework Agreement "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 which, together with its subsidiaries, own approximately 34.71% of the issued share capital of the Company as at the date of this announcement "Chaozhou Power Generation Company" Guangdong Datang International Chaozhou Power Generation Company Limited, a subsidiary of the Company, details of which are set out in the section entitled "Information on the Parties to the Agreements" "Chaozhou Shipping Framework Agreement" the framework agreement in relation to the provision of annual coal transportation service dated 7 January 2015 entered into between Shipping Company and Chaozhou Power Generation Company "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(s)" has the meaning ascribed to it under the Listing Rules "Directors" the director(s) of the Company "Listing Rules" The Rules Governing the Listing of Securities on The Stock Exchange "Lvsigang Power Generation Company" Jiangsu Datang International Lvsigang Power Generation Company Limited, a subsidiary of the Company, details of which are set out in the section entitled "Information on the Parties to the Agreements" "Lvsigang Shipping Framework Agreement" the framework agreement in relation to the provision of annual coal transportation service dated 7 January 2015 entered into between Shipping Company and Lvsigang Power Generation Company "PRC" the People's Republic of China "RMB" Renminbi, the lawful currency of the PRC "Shipping Company" Jiangsu Datang Shipping Company Limited, a subsidiary of the Company, details of which are set out in the section entitled "Information on the Parties to the Agreements" "Stock Exchange" The Stock Exchange of Hong Kong Limited "%" Percent By Order of the Board Zhou Gang Secretary to the Board Beijing, the PRC, 7 January 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