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9 Jun 2015 12:16
DATANG INTERNATIONAL POWER GENERATION COMPANY LD - Continuing Connected TransactionsDATANG INTERNATIONAL POWER GENERATION COMPANY LD - Continuing Connected Transactions
PR Newswire
London, June 9
Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the 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
COAL PURCHASE AND SALE FRAMEWORK AGREEMENT
On 9 June 2015, Datang Fuel Company and Beijing Datang Fuel Company entered into the Coal Purchase and Sale Framework Agreement, pursuant to which Datang Fuel Company agreed to sell coal to Beijing Datang Fuel Company with a maximum aggregate annual transaction amount of approximately RMB460 million for a term commencing from 1 May 2015 to 31 December 2015.
LISTING RULES IMPLICATIONS
As at the date of this announcement, CDC is the controlling shareholder of the Company, which together with its subsidiaries hold approximately 34.71% of the issued share capital of the Company. Datang Fuel Company is a wholly-owned subsidiary of CDC and is therefore a connected person of the Company. The transactions contemplated under the Coal Purchase and Sale Framework Agreement constitute continuing connected transactions of the Company.
Since all of the applicable percentage ratios (as defined under Rule14.07 of the Listing Rules) in respect of the transaction amount under the Coal Purchase and Sale Framework Agreement are more than 0.1% but below 5%, the Coal Purchase and Sale Framework Agreement and the transactions contemplated thereunder are subject to the reporting and announcement requirements, but are exempted from the independent shareholders' approval requirements under Chapter 14A of the Listing Rules.
COAL PURCHASE AND SALE FRAMEWORK AGREEMENT
Date
9 June 2015
Parties
Datang Fuel Company, Beijing Datang Fuel Company
Major terms
(1) Subject matter: Datang Fuel Company agreed to sell coal to Beijing Datang Fuel Company during the term of the agreement.
The parties may, from time to time during the term of the agreement, enter into specific sale contracts in respect of the sale of coal, and such specific sale contracts shall be subject to the terms of the Coal Purchase and Sale Framework Agreement.
(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: Commencing from 1 May 2015 to 31 December 2015.
(5) The Coal Purchase and Sale Framework Agreement becomes effective when they are duly signed by both parties.
The Company confirms that the transaction amounts under the Coal Purchase and Sale Framework Agreement the period from 1 May 2015 to the date of this announcement is below the de minimis threshold under Chapter 14A of the Listing Rules.
Annual Cap
It is expected that the maximum transaction amount in respect of the Coal Purchase and Sale Framework Agreement for the year ending 31 December 2015 is RMB460 million; such amount is determined with reference to (i) the anticipated quantity of coal to be sold by Datang Fuel Company to Beijing Datang Fuel Company for the period from 1 May 2015 to 31 December 2015; and (ii) the estimated market price of coal.
Historical Transaction Amounts
No transaction was conducted between Datang Fuel Company and Beijing Datang Fuel Company for the period from 30 April 2012 to 30 April 2015.
PROCEDURES FOR DETERMINATION OF COAL PRICING POLICY
The consideration for the purchase of coal under the Coal Purchase and Sale Framework Agreement is to be determined with reference to the market price of coal and on normal commercial terms on the basis of arm's length negotiation according to market conditions. The Company has also taken into account the following factors in determination of the consideration:
(1) Purchase costs of coal of the Company, financial costs, insurance expenses, laboratory fee, business tax and other expenses.
(2) Professional departments of the Company are responsible for collecting market prices of coal and referring to the market trends of the last three years for determination of pricing.
(3) The purchasing price of coal is determined with reference to the purchase cost of Beijing Datang Fuel Company, as well as price trends in the Bohai Sea and international price trends.
REASONS FOR AND BENEFITS OF ENTERING INTO THE COAL PURCHASE AND SALE FRAMEWORK AGREEMENT
The purchase of coal by Beijing Datang Fuel Company from Datang Fuel Company is primarily for fully leveraging the advantages in terms of procurement of Beijing Datang Fuel Company, securing coal supply to the Company and the power generation enterprises of its subsidiaries, and is beneficial for the adjustment of coal structure of the Company and the power generation enterprises of its subsidiaries, so as to control operating costs and enhance profitability.
The Directors (including the independent non-executive Directors) are of the view that the terms of the Coal Purchase and Sale Framework Agreement are fair and reasonable, have been entered into after arm's length negotiation between all parties thereto and determined on normal commercial terms and is in the interests of the Company and the Shareholders as a whole.
None of the Directors has material interest in the transactions under the Coal Purchase and Sale Framework Agreement. Connected Directors, including Chen Jinhang, Hu Shengmu and Liang Yongpan, have abstained from voting for the relevant resolution at the relevant Board meeting pursuant to the listing rules of the Shanghai Stock Exchange.
INFORMATION ON THE PARTIES TO THE AGREEMENT
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. Beijing Datang Fuel Company is a subsidiary of the Company. It is principally engaged in sale of coal, investment management and technical services. The equity holding structure of the company is as follows: 51% of its equity interest is held by the Company and 49% of its equity interest is held by Datang Fuel Company, a wholly-owned subsidiary of CDC.
4. Datang Fuel Company is a wholly-owned subsidiary of CDC with registered capital of RMB644 billion. It is principally engages in the business of electric fuel.
LISTING RULES IMPLICATIONS
As at the date of this announcement, CDC is the controlling shareholder of the Company, which together with its subsidiaries hold approximately 34.71% of the issued share capital of the Company. Datang Fuel Company is a wholly-owned subsidiary of CDC and is therefore a connected person of the Company. The transactions contemplated under the Coal Purchase and Sale Framework Agreement constitute continuing connected transactions of the Company.
Since all of the applicable percentage ratios (as defined under Rule14.07 of the Listing Rules) in respect of the transaction amount under the Coal Purchase and Sale Framework Agreement are more than 0.1% but below 5%, the Coal Purchase and Sale Framework Agreement and the transactions contemplated thereunder are subject to the reporting and announcement requirements, but are exempted from the independent shareholders' approval requirements under Chapter 14A of the Listing Rules.
DEFINITIONS
In this announcement, unless the context otherwise requires, the following expressions have the following meanings:
| "Beijing Datang Fuel Company" | Beijing Datang Fuel Company Limited, a subsidiary of the Company, details of which are set out in the section headed "Information on the Parties to the Agreements" | |
| "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 | |
| "Coal Purchase and Sale Framework Agreement" | The coal purchase and sale framework agreement entered into between Datang Fuel Company and Beijing Datang Fuel Company on 9 June 2015 | |
| "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 | |
| "connected transaction(s)" | has the meaning ascribed to it under the Listing Rules | |
| "Directors" | the director(s) of the Company | |
| "Datang Fuel Company" | Datang Electric Power Fuel Company Limited, a wholly-owned subsidiary of CDC, details of which are set out in the section headed "Information on Parties to the Agreement" | |
| "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 | |
| "%" | percent |
By Order of the Board Zhou Gang Secretary to the Board
Beijing, the PRC, 9 June 2015
As at the date of this announcement, the Directors of the Company are:
Chen Jinhang, Hu Shengmu, Wu Jing, Lian 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
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