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 CONTINUING CONNECTED TRANSACTIONS ANNUAL SHIPPING FRAMEWORK AGREEMENTS On 29 September 2014, Shipping Company entered into the Annual ShippingFramework Agreements with Lvsigang Power Generation Company and Chaozhou PowerGeneration Company, respectively, to carry out the following continuingconnected 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 2014 to 31 December 2014. (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 2014 to 31 December 2014. LISTING RULES IMPLICATIONS As at the date of this announcement, CDC is the controlling shareholder of theCompany, which together with its subsidiaries hold approximately 34.71% of theissued share capital of the Company. Since CDC and its subsidiaries holdcertain equity interests in Lvsigang Power Generation Company and ChaozhouPower Generation Company, therefore Lvsigang Power Generation Company andChaozhou Power Generation Company are connected persons of the Company. Thetransactions contemplated under the Lvsigang Shipping Framework Agreement andthe Chaozhou Shipping Framework Agreement constitute continuing connectedtransactions of the Company. Since all of the applicable percentage ratios (as defined under Rule14.07 ofthe Listing Rules) in respect of the transaction amounts under each of theLvsigang Shipping Framework Agreement and the Chaozhou Shipping FrameworkAgreement are higher than 0.1% but below 5%, the transactions contemplatedunder each of the Lvsigang Shipping Framework Agreement and the ChaozhouShipping Framework Agreement respectively are only subject to the reporting andannouncement requirements, but do not require the approval by the independentshareholders of the Company under Chapter 14A of the Listing Rules. ANNUAL SHIPPING FRAMEWORK AGREEMENTS Lvsigang Shipping Framework Agreement Date: 29 September 2014 Parties: Shipping Company, Lvsigang Power Generation Company Chaozhou Shipping Framework Agreement Date: 29 September 2014 Parties: Shipping Company, Chaozhou Power Generation Company The terms of Lvsigang Shipping Framework Agreement and the Chaozhou ShippingFramework Agreement are substantially the same, the major terms of which are asfollows: (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 2014 to 31 December 2014. 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 from 1 January 2014 to 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 LvsigangShipping Framework Agreement for the year ending 31 December 2014 is RMB83million; and it is expected that the maximum transaction amount in respect ofthe Chaozhou Shipping Framework Agreement for the year ending 31 December 2014is RMB189 million; such amounts are determined with reference to (i) theanticipated quantity of coal to be transported by Shipping Company for LvsigangPower Generation Company and Chaozhou Power Generation Company for the yearending 31 December 2014; and (ii) the estimated market price of coaltransportation. As set out in earlier section of this announcement, the consideration for theprovision of the coal transportation service under the Annual ShippingFramework Agreements is to be determined in the ordinary course of business onnormal commercial terms on the basis of arm's length negotiation according toprevailing market conditions. The Company has also taken into account thefollowing factors in 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 expense, 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 2014 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 required by 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. Historical transaction amounts The fee of coal transportation service provided by Shipping Company to LvsigangPower Generation Company is RMB83 million for the year ended 31 December 2013. The fee of coal transportation service provided by Shipping Company to ChaozhouPower Generation Company is RMB89 million for the year ended 31 December 2013. From 1 January 2011 to 31 December 2012, the Shipping Company did not conductany relevant transaction with Lvsigang Power Generation Company and ChaozhouPower Generation Company. REASONS FOR AND BENEFITS OF ENTERING INTO THE ANNUAL SHIPPING FRAMEWORKAGREEMENTS The provision of fuel transportation service by Shipping Company to LvsigangPower Generation Company and Chaozhou Power Generation Company is able toensure the fuel supply to the coastal power generation enterprises of theCompany since Shipping Company can arrange transportation in a more timely andrapid manner according to the fuel demand from the power generation enterprisesof the Company. The Directors (including the views of the independent non-executive Directors)are of the view that the terms of the Annual Shipping Framework Agreements arefair and reasonable, have been entered into after arm's length negotiationbetween all parties thereto and determined on normal commercial terms and is inthe interests of the Company and the shareholders as a whole. 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. 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. 3. 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. 4. 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. 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: 97.54% of its equity interest is held by the Company and 2.46% 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 theCompany, which together with its subsidiaries hold approximately 34.71% of theissued share capital of the Company. Since CDC and its subsidiaries holdcertain equity interests in Lvsigang Power Generation Company and ChaozhouPower Generation Company, therefore Lvsigang Power Generation Company andChaozhou Power Generation Company are connected persons of the Company. Thetransactions contemplated under the Lvsigang Shipping Framework Agreement andthe Chaozhou Shipping Framework Agreement constitute continuing connectedtransactions of the Company. Since all of the applicable percentage ratios (as defined under Rule14.07 ofthe Listing Rules) in respect of the transaction amounts under each of theLvsigang Shipping Framework Agreement and the Chaozhou Shipping FrameworkAgreement are higher than 0.1% but below 5%, the transactions contemplatedunder each of the Lvsigang Shipping Framework Agreement and the ChaozhouShipping Framework Agreement respectively are only subject to the reporting andannouncement requirements, but do not require the approval by the independentshareholders of the Company under Chapter 14A of the Listing Rules. None of the Directors has material interest in the Annual Shipping FrameworkAgreements. Those connected Directors, including Chen Jinhang, Hu Shengmu andFang Qinghai, have abstained from voting at the Board meeting for approval ofthe relevant transactions in accordance with the requirements of the ListingRules of the Shanghai Stock Exchange. DEFINITIONS In this announcement, unless the context otherwise requires, the followingexpressions have the following meanings: "Annual Shipping Lvsigang Shipping Framework Agreement andFramework Agreements" 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 Guangdong Datang International Chaozhou PowerGeneration Company" 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 the framework agreement in relation to annualFramework Agreement" coal transportation service dated 29 September 2014 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 Jiangsu Datang International Lvsigang PowerGeneration Company" 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 the framework agreement in relation to annualFramework Agreement" coal transportation service dated 29 September 2014 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, 29 September 2014 As at the date of this announcement, the Directors of the Company 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