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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 CONTINUING CONNECTED TRANSACTIONS
FRAMEWORK AGREEMENTS
On 18 April 2012, the Company and its subsidiaries entered into the Framework Agreements with the relevant connected persons to carry out the following day-to-day continuing connected transactions:
(1) Purchase of coal from Beijing Datang Fuel Co. and its wholly-owned subsidiary by
the Company and its subsidiaries (a) the Company entered into the "Framework Agreement for the Purchase and Sale of Coal" with Beijing Datang Fuel Co., pursuant to which Beijing Datang Fuel Co. agreed to supply different varieties of coal to the Company and its subsidiaries for a term of one year commencing from 1 January 2012 to 31 December 2012; (b) certain subsidiaries of the Company located at Inner Mongolia entered into the "Inner Mongolia Purchase of Coal Contracts" with Inner Mongolia Fuel Co., pursuant to which Inner Mongolia Fuel Co. agreed to supply coal for production purposes to certain subsidiaries of the Company located at Inner Mongolia for a term of one year commencing from 1 January 2012 to 31 December 2012.
(2) Sale of coal by certain subsidiaries of the Company to the subsidiaries of
CDC (a) Beijing Datang Fuel Co. entered into the "Heshan Purchase and Sale of Coal Contract" with Guiguan Heshan Power Generation Co., pursuant to which Beijing Datang Fuel Co. agreed to supply coal for power generation to Guiguan Heshan Power Generation Co. for a term of one year commencing from 1 January 2012 to 31 December 2012; (b) Xilinhaote Mining Co. entered into the "Xilinhaote Purchase and Sale of Coal Contract" with Coal Sales Co., pursuant to which Xilinhaote Mining Co. agreed to sell a certain amount of self-produced coal to Coal Sales Co. for further sale for a term of one year commencing from 1 January 2012 to 31 December 2012.
CONTINUING CONNECTED TRANSACTIONS
Upon completion of the relevant procedures for changing the business and commercial registration of Beijing Datang Fuel Co. under the Capital Contribution Agreement, Beijing Datang Fuel Co. and Inner Mongolia Fuel Co. will become connected persons of the Company and the transactions contemplated under the Framework Agreement for the Purchase and Sale of Coal and the Inner Mongolia Purchase of Coal Contracts will become continuing connected transactions of the Company. Since one or more of the applicable percentage ratios (as defined under Rule 14.07 of the Listing Rules) in respect of the aggregated transaction amount under the Framework Agreement for the Purchase and Sale of Coal and the Inner Mongolia Purchase of Coal Contracts is more than 5%, the Framework Agreement for the Purchase and Sale of Coal and the Inner Mongolia Purchase of Coal Contracts and the transactions contemplated thereunder are subject to the reporting, announcement and independent Shareholders' approval requirements under Chapter 14A of the Listing Rules.
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. Guiguan Heshan Power Generation Co. is a controlled subsidiary of Guangxi Guiguan Electric Power Co., Ltd., a controlled subsidiary of CDC. Coal Sales Co. is a wholly-owned subsidiary of China Datang Coal Industry Co. Ltd., a wholly-owned subsidiary of CDC. Guiguan Heshan Power Generation Co. and Coal Sales Co. are therefore connected persons of the Company pursuant to Chapter 14A of the Listing Rules. The Heshan Purchase and Sale of Coal Contract and the Xilinhaote Purchase and Sale of Coal Contract and the transactions contemplated thereunder constitute continuing connected transactions of the Company. Since each of the applicable percentage ratios (as defined under Rule 14.07 of the Listing Rules) in respect of the aggregated transaction amount under the Heshan Purchase and Sale of Coal Contract and Xilinhaote Purchase and Sale of Coal Contract is higher than 0.1% but lower than 5%, the Heshan Purchase and Sale of Coal Contract, the Xilinhaote Purchase and Sale of Coal Contract and the transactions contemplated thereunder are only subject to the reporting and announcement requirements, but are exempt from the approval by the independent Shareholders of the Company under the requirements of Chapter 14A of the Listing Rules.
GENERAL MEETING OF THE COMPANY
The Company will convene a general meeting of the Shareholders in a timely manner and will submit the relevant resolutions relating to the Framework Agreement for the Purchase and Sale of Coal and the Inner Mongolia Purchase of Coal Contracts and the continuing connected transactions (including the proposed caps on the transactions) contemplated thereunder for independent Shareholders' approval.
An Independent Board Committee of the Company will be formed to advise the independent Shareholders on the terms of the transactions (including the proposed caps on the transactions) under the Framework Agreement for the Purchase and Sale of Coal and the Inner Mongolia Purchase of Coal Contracts. An independent financial adviser will be appointed to advise the Independent Board Committee and the independent Shareholders on the terms of the transactions (including the proposed caps on the transactions) under the Framework Agreement for the Purchase and Sale of Coal and the Inner Mongolia Purchase of Coal Contracts.
A circular containing further information of the Framework Agreement for the Purchase and Sale of Coal and the Inner Mongolia Purchase of Coal Contracts and the continuing connected transactions thereunder, a letter from the Independent Board Committee and an advice letter from the independent financial adviser will be despatched to the Shareholders in accordance with the Listing Rules on or before 10 May 2012.
A. Purchase of coal from Beijing Datang Fuel Co. and its wholly-owned subsidiary by
the Company and its subsidiary
(1) FRAMEWORK AGREEMENT FOR THE PURCHASE AND SALE OF COAL
Date: 18 April 2012 Parties: the Company and Beijing Datang Fuel Co. Major terms: 1. Subject Matter: Beijing Datang Fuel Co. agreed to supply coal by batches throughout the term of the agreement primarily to the Company's power plants located in coastal areas and other power plants owned by the Company or its subsidiaries. The parties may, from time to time during the term of the agreement, enter into specific purchase and sales contracts in respect of the supply of coal by Beijing Datang Fuel Co. provided that such specific purchase and sales contracts shall be subject to the terms of the Framework Agreement for the Purchase and Sale of Coal. 2. Consideration: The prices with respect to the supply of coal in specific batches by Beijing Datang Fuel Co. to the Group shall be determined in the ordinary course of business on normal commercial terms, on the basis of arm's length negotiation according to the prevailing market conditions. The estimated annual transaction amount is approximately RMB21,700 million. 3. Settlement and payment: settlement shall be made by the Company within seven days upon the issue of invoice by Beijing Datang Fuel Co. or on such other terms to be agreed by the parties. 4. Term: One year, commencing from 1 January 2012 to 31 December 2012. 5. The Framework Agreement for the Purchase and Sale of Coal will become effective when it is duly signed by both parties and their respective company seals are affixed thereto, and is subject to independent Shareholders' approval at the general meeting of the Company. Annual cap It is expected that the maximum transaction amount in respect of the Framework Agreement for the Purchase and Sale of Coal for the year ending 31 December 2012 will not exceed RMB21,700 million, which is determined with reference to (i) the anticipated quantity of coal to be purchased by the Group from Beijing Datang Fuel Co. for the year ending 31 December 2012; and (ii) the estimated market price of coal. Historical transaction amounts The total fees paid by the Group to Beijing Datang Fuel Co. for the three years ended 31 December 2009, 31 December 2010 and 31 December 2011 amounted to approximately RMB568 million, RMB13,882 million and RMB15,809 million, respectively.
(2) INNER MONGOLIA PURCHASE OF COAL CONTRACTS
Date & Parties : On 18 April 2012, Inner Mongolia Fuel Co. entered into four Inner Mongolia Purchase of Coal Contracts with each of (i) Tuoketuo Power Generation Co.; (ii) Tuoketuo II Power Co.; (iii) Hohhot Thermal Power Co.; and (iv) Renewable Energy Resources Co. Major terms: The terms of the four Inner Mongolia Purchase of Coal Contracts are materially the same, the material terms of which are summarized as follows: 1. Subject Matter: Inner Mongolia Fuel Co. agreed to supply coal by batches to certain subsidiaries of the Company located at Inner Mongolia, namely Tuoketuo Power Generation Co., Tuoketuo II Power Co., Hohhot Thermal Power Co. and Renewable Energy Resources Co. during the term of the agreement. The parties may, from time to time during the term of the agreement, enter into specific purchase and sales contracts in respect of the supply of coal by Inner Mongolia Fuel Co. provided that such specific purchase and sales contracts shall be subject to the terms of the Inner Mongolia Purchase of Coal Contracts. 2. Consideration: The prices with respect to the supply of coal in specific batches by Inner Mongolia Fuel Co. to certain subsidiaries of the Company located at Inner Mongolia shall be determined in the ordinary course of business on normal commercial terms on the basis of arm's length negotiation according to the prevailing market conditions. The estimated annual transaction amount is approximately RMB5,200 million. 3. Settlement and payment: settlement shall be made by cash on a monthly basis or on such other terms to be agreed by the parties. 4. Term: One year, commencing from 1 January 2012 to 31 December 2012. 5. The Inner Mongolia Purchase of Coal Contracts will become effective when it is duly signed by both parties and their respective company seals are affixed thereto, and is subject to independent Shareholders' approval at the general meeting of the Company Annual cap It is expected that the maximum aggregate transaction amount in respect of the Inner Mongolia Purchase of Coal Contracts for the year ending 31 December 2012 will not exceed RMB5,200 million, which is determined with reference to (i) the anticipated quantity of coal to be purchased by the relevant subsidiaries of the Company located at Inner Mongolia from Inner Mongolia Fuel Co. for the year ending 31 December 2012; and (ii) the estimated market price of coal. Historical transaction amounts The total fees paid by the relevant subsidiaries of the Company located at Inner Mongolia to Inner Mongolia Fuel Co. for the year ended 31 December 2011 amounted to approximately RMB3,800 million (excluding tax). The relevant subsidiaries of the Company located at Inner Mongolia did not conduct any transactions relating to the supply of coal with Inner Mongolia Fuel Co. prior to 1 January 2011.
LISTING RULES IMPLICATIONS FOR THE FRAMEWORK AGREEMENT FOR THE PURCHASE AND SALE OF COAL AND THE INNER MONGOLIA PURCHASE OF COAL CONTRACTS
On 12 October 2011, the Company, Datang Electric Power Fuel Co. and Beijing Datang Fuel Co. entered into the Capital Contribution Agreement, pursuant to which Datang Electric Power Fuel Co., a wholly-owned subsidiary of CDC, agreed to make capital contribution to Beijing Datang Fuel Co.. Upon completion of the capital contribution, Datang Electric Power Fuel Co. will hold 49% equity interest in Beijing Datang Fuel Co., a former wholly-owned subsidiary of the Company, and the Company will hold a 51% equity interest in Beijing Datang Fuel Co.. As at the date of this announcement, the procedures for making changes to the business and commercial registration of Beijing Datang Fuel Co. are still in progress.
Upon completion of the relevant procedures for changing the business and commercial registration of Beijing Datang Fuel Co., Beijing Datang Fuel Co. and Inner Mongolia Fuel Co. will become connected persons of the Company and the transactions contemplated under the Framework Agreement for the Purchase and Sale of Coal and the Inner Mongolia Purchase of Coal Contracts will become continuing connected transactions of the Company.
Since one or more of the applicable percentage ratios (as defined under Rule 14.07 of the Listing Rules) in respect of the aggregated transaction amount under the Framework Agreement for the Purchase and Sale of Coal and the Inner Mongolia Purchase of Coal Contracts is more than 5%, the Framework Agreement for the Purchase and Sale of Coal and the Inner Mongolia Purchase of Coal Contracts and the transactions contemplated thereunder are subject to the reporting, announcement and independent Shareholders' approval requirements under Chapter 14A of the Listing Rules.
No Director has a material interest in the transactions contemplated under the Framework Agreement for the Purchase and Sale of Coal and the Inner Mongolia Purchase of Coal Contracts. Connected Directors, including Liu Shunda, Hu Shengmu and Fang Qinghai, who are the principal management staff of CDC, have abstained from voting on the approval of the relevant transactions at the Board meeting in accordance with the requirements of the listing rules of the Shanghai Stock Exchange.
REASONS FOR AND BENEFITS OF ENTERING INTO THE FRAMEWORK AGREEMENT FOR THE PURCHASE AND SALE OF COAL AND THE INNER MONGOLIA PURCHASE OF COAL CONTRACTS
Beijing Datang Fuel Co. is a specialized company mainly engaged in the business of coal sales. It has advantages in coal resources, supplier relationships and transportation arrangements in the principal coal-producing areas of China such as Shanxi Province and the Inner Mongolia Autonomous Region and target countries for coal export such as Indonesia. It has accumulated extensive experience in the practical processes for coal business operations over many years. Coal consumption for power generation has been increasing every year as a result of the rapid development of the coastal power generation companies of the Company. Meanwhile, the coal market is very challenging because it is difficult to secure coal supply and to control coal prices. The centralized supply of coal for power generation by Beijing Datang Fuel Co. to the Company's power generation companies in coastal areas and other power generation companies owned by the Company can fully leverage the advantages of the specialized company, secure stable coal supply, expand their supply channels, adjust the composition of their coal portfolios, and stabilize the market prices of coal to a certain extent, with a view to cutting overall procurement costs and mitigating the adverse impacts of the coal market on power generation companies.
Inner Mongolia Fuel Co. is a wholly-owned subsidiary of Beijing Datang Fuel Co. and is primarily responsible for the supply of coal for the power generation for the Company in the Inner Mongolia region as well as the coordination and support in the procurement of coal in the Inner Mongolia region for other power generation enterprises of the Company outside the Inner Mongolia region. The centralized arrangement for and coordination of coal procurement by Inner Mongolia Fuel Co. is conducive to the maximization of the economies of scale to enhance the bargaining power of the Company; to the sharing of social, human and information resources for increasing procurement efficiency and cutting the costs of procurement; to enhancing the importance of Inner Mongolia Fuel Co. as a participant in the regional coal market that plays a key role in stabilizing the relationship between supply and demand; to the facilitation of the application for the allocation of coal and transportation resources to secure the supply of coal for the Company's power generation and to other enterprises for production purposes; and to the control of purchase prices and costs for maintaining and enhancing the profitability of power generation enterprises.
The Directors (excluding the independent non-executive Directors whose views will be set out in the circular after considering the advice from the independent financial adviser) are of the view that the relevant terms of the Framework Agreement for the Purchase and Sale of Coal and the Inner Mongolia Purchase of Coal Contracts are fair and reasonable and are in the interests of the Company and the Shareholders as a whole.
B. Sale of coal by certain subsidiaries of the Company to the subsidiaries of CDC
(1) HESHAN PURCHASE AND SALE OF COAL CONTRACT
Date: 18 April 2012 Parties: Beijing Datang Fuel Co. and Guiguan Heshan Power Generation Co. Major terms: 1. Subject matter: Beijing Datang Fuel Co. agreed to supply coal by batches to Guiguan Heshan Power Generation Co. throughout the term of the agreement. The parties may, from time to time during the term of the agreement, enter into specific purchase and sales contracts in respect of the supply of coal by Beijing Datang Fuel Co. provided that such specific purchase and sales contracts shall be subject to the terms of the Heshan Purchase and Sale of Coal Contract. 2. Consideration: The prices with respect to the supply of coal by specific batches shall be determined in the ordinary course of business on normal commercial terms by the parties through arm's length negotiations according to the prevailing market conditions. The estimated annual transaction amount is approximately RMB405 million. 3. Settlement and payment: settlement shall be made by Guiguan Heshan Power Generation Co. within seven days upon the issue of invoice by Beijing Datang Fuel Co. or on such other terms to be agreed by the parties. 4. Term: One year, commencing from 1 January 2012 to 31 December 2012. 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 the Heshan Purchase and Sale of Coal Contract for the period from 1 January 2012 to the date of this announcement does not exceed the de minimis threshold under Chapter 14A of the Listing Rules. 5. The Heshan Purchase and Sale of Coal Contract will become effective upon the signing of the contracts by both parties. Annual cap It is expected that the maximum transaction amount in respect of the Heshan Purchase and Sale of Coal Contract for the year ending 31 December 2012 will not exceed RMB405 million, which is determined with reference to (i) the anticipated quantity of coal to be purchased by the Guiguan Heshan Power Generation Co. from Beijing Datang Fuel Co. for the year ending 31 December 2012; and (ii) the estimated market price of coal. Historical transaction amounts Guiguan Heshan Power Generation Co. did not conduct any transactions relating to the supply of coal with Beijing Datang Fuel Co. for the three years ended 31 December 2011.
(2) XILINHAOTE PURCHASE AND SALE OF COAL CONTRACT
Date: 18 April 2012 Parties: Xilinhaote Mining Co. and Coal Sales Co. Major terms: 1. Subject Matter: Coal Sales Co. agreed to purchase coal from Xilinhaote Mining Co. by batches throughout the term of the agreement. The parties may, from time to time during the term of the agreement, enter into specific purchase and sales contracts in respect of the supply of coal by Xilinhaote Mining Co. provided that such specific purchase and sales contracts shall be subject to the terms of the Xilinhaote Purchase and Sale of Coal Contract. 2. Consideration: The prices in respect of the supply of coal by specific batches shall be determined in the ordinary course of business on normal commercial terms by the parties through arm's length negotiations according to the prevailing market conditions. The estimated annual transaction amount is approximately RMB250 million. 3. Settlement and payment: prepayment shall be made by Coal Sales Co. before the supply of coal and monthly reconciliation of accounts will be made for settlement. Settlement may also be made on such other terms to be agreed by the parties. 4. Term: One year, commencing from 1 January 2012 to 31 December 2012. 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 the Xilinhaote Purchase and Sale of Coal Contract for the period from 1 January 2012 to the date of this announcement does not exceed the de minimis threshold under Chapter 14A of the Listing Rules. 5. The Xilinhaote Purchase and Sale of Coal Contract will become effective upon the signing of the contracts by both parties. Annual cap It is expected that the maximum transaction amount in respect of the Xilinhaote Purchase and Sale of Coal Contract for the year ending 31 December 2012 will not exceed RMB250 million, which is determined with reference to (i) the anticipated quantity of coal to be purchased by Coal Sales Co. from Xilinhaote Mining Co. for the year ending 31 December 2012; and (ii) the estimated market price of coal. Historical transaction amounts The fees paid by Coal Sales Co. to Xilinhaote Mining Co. for the purchase of coal for the year ended 31 December 2011 amounted to approximately RMB175 million. Xilinhaote Mining Co. did not conduct any transactions relating to the supply of coal with Coal Sales Co. prior to 1 January 2011.
LISTING RULES IMPLICATIONS FOR THE HESHAN PURCHASE AND SALE OF COAL CONTRACT AND THE XILINHAOTE PURCHASE AND SALE OF COAL CONTRACT
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.
Guiguan Heshan Power Generation Co. is a controlled subsidiary of Guangxi Guiguan Electric Power Co., Ltd., a controlled subsidiary of CDC. Coal Sales Co. is a wholly-owned subsidiary of China Datang Coal Industry Co. Ltd., a wholly-owned subsidiary of CDC. Guiguan Heshan Power Generation Co. and Coal Sales Co. are therefore connected parties of the Company pursuant to Chapter 14A of the Listing Rules. The Heshan Purchase and Sale of Coal Contract and the Xilinhaote Purchase and Sale of Coal Contract and the transactions contemplated thereunder are continuing connected transactions of the Company.
Since each of the applicable percentage ratios (as defined under Rule 14.07 of the Listing Rules) in respect of the aggregated transaction amount under the Heshan Purchase and Sale of Coal Contract and Xilinhaote Purchase and Sale of Coal Contract is higher than 0.1% but lower than 5%, the Heshan Purchase and Sale of Coal Contract, the Xilinhaote Purchase and Sale of Coal Contract and the transactions contemplated thereunder are only subject to the reporting and announcement requirements, but are exempt from the approval by the independent Shareholders of the Company under the requirements of Chapter 14A of the Listing Rules.
No Director has a material interest in the transactions. Connected Directors, including Liu Shunda, Hu Shengmu and Fang Qinghai, who are the principal management staff of CDC. have abstained from voting on the approval of the relevant transactions at the Board meeting in accordance with the requirements of the listing rules of the Shanghai Stock Exchange.
REASONS FOR AND BENEFITS OF ENTERING INTO THE HESHAN PURCHASE AND SALE OF COAL CONTRACT AND THE XILINHAOTE PURCHASE AND SALE OF COAL CONTRACT
Guiguan Heshan Power Generation Co., which is based in the Guangxi Zhuang Autonomous Region, is primarily engaged in the coal-fired power generation business. To secure the supply of thermal coal, it intends to procure imported coal to mitigate the problem of the lack of resources and high prices in the region. Beijing Datang Fuel Co. is a specialized company engaged in the coal business. It enjoys remarkable advantages in resources, supplier relationships and prices as a result of the rapid development of its coal import business in recent years. It has its own need to expand the domestic market as well. Therefore, the collaboration between the two parties regarding coal purchase and sale could meet the needs of Guiguan Heshan Power Generation Co. for normal coal consumption and is conducive to Beijing Datang Fuel Co.'s expansion of its business for the import of coal for the domestic market to enhance its operational strengths.
Shengli Open-pit Coal Mine East Unit 2 of Xilinhaote Mining Co. primarily supplies coal to the Duolun Coal Chemical Project and the Keqi Coal-based Gas Project of the Company for the production of chemicals. At present, the scale of the coal chemical project is not large enough to consume all of the coal produced by Shengli Coal Mine East Unit 2. The excess quantity is sold in the market. Coal Sales Co. is a specialized coal sales company with certain advantages in transport arrangements and customer and market resources. Therefore, Xilinhaote Mining Co.'s exclusive sales business for certain coal through Coal Sales Co. could enable Xilinhaote Mining Co. to concentrate on engaging in rational coal production to reduce the cost of sales and to optimize its operating results.
The Directors (including the independent non-executive Directors) are of the view that the relevant terms of the Heshan Purchase and Sale of Coal Contract and the Xilinhaote Purchase and Sale of Coal Contract are fair and reasonable and are in the interests of the Company and the Shareholders as a whole.
INFORMATION ON THE PARTIES TO THE FRAMEWORK 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, with its main service areas
located in the PRC.
2. Beijing Datang Fuel Co. is a controlled subsidiary of the Company incorporated in
December 2006. It is principally engaged in the sale of coal, investment management and technical services, and is responsible for supplying coal to power generation enterprises owned by the Company in coastal areas and other power generation enterprises of the Company. Upon completion of the relevant procedures for changing the business and commercial registration of Beijing Datang Fuel Co., the Company will hold a 51% equity interest in Beijing Datang Fuel Co., while Datang Electric Power Fuel Co., Ltd., a wholly-owned subsidiary of CDC, will hold a 49% equity interest in Beijing Datang Fuel Co.
3. Inner Mongolia Fuel Co. is a wholly-owned subsidiary of Beijing Datang Fuel Co.,
incorporated in Ordos City, Inner Mongolia, in July 2007. It is principally engaged in the wholesaling of coal and coal products, investment management and technical services, and is responsible for the supply and sale of coal to, as well as the settlement of payment for coal for, the power plants and coal mine operators in the Inner Mongolia Autonomous Region managed by the Company's Inner Mongolia branch.
4. Guiguan Heshan Power Generation Co. is a controlled subsidiary of Guangxi Guiguan
Electric Power Co., Ltd., a controlled subsidiary of CDC. It has seven generating
units with a total installed capacity of 1,130,000 kW.
5. Coal Sales Co. is a wholly-owned subsidiary of China Datang Coal Industry Co.,
Ltd., a wholly-owned subsidiary of CDC. It was incorporated in August 2010. It is
principally engaged in the sale of coal within the system of the Group, related
technical services, technology development and investment management.
6. Xilinhaote Mining Co., a controlled subsidiary of the Company officially
incorporated in Xilinhaote City on 23 August 2007, is principally responsible for the development, construction and operation of the Shengli Open-pit Coal Mine East Unit 2 projects (the annual capacity of phase 1 of the project is 10 million tonnes, and that of phase 2 is 20 million tonnes). The Company holds a 60% equity interest in Xilinhaote Mining Co., while China Datang Coal Industry Co., Ltd. holds a 40% equity interest.
GENERAL MEETING OF THE COMPANY
The Company will convene a general meeting of the Shareholders in a timely manner and will submit the relevant resolutions relating to the Framework Agreement for the Purchase and Sale of Coal and the Inner Mongolia Purchase of Coal Contracts and the continuing connected transactions (including the proposed caps on the transactions) contemplated thereunder for independent Shareholders' approval.
An Independent Board Committee of the Company will be formed to advise the independent Shareholders on the terms of the transactions (including the proposed caps on the transactions) under the Framework Agreement for the Purchase and Sale of Coal and the Inner Mongolia Purchase of Coal Contracts. An independent financial adviser will be appointed to advise the Independent Board Committee and the independent Shareholders on the terms of the transactions (including the proposed caps on the transactions) under the Framework Agreement for the Purchase and Sale of Coal and the Inner Mongolia Purchase of Coal Contracts.
A circular containing further information of the Framework Agreement for the Purchase and Sale of Coal and the Inner Mongolia Purchase of Coal Contracts and the continuing connected transactions thereunder, a letter from the Independent Board Committee and an advice letter from the independent financial adviser will be despatched to the Shareholders in accordance with the Listing Rules on or before 10 May 2012.
Any Shareholders and their associates who have a material interest in Framework Agreement for the Purchase and Sale of Coal and the Inner Mongolia Purchase of Coal Contracts, will abstain from voting at the general meeting of the Company to be held for (including but not limited to) the consideration and approval of the Framework Agreement for the Purchase and Sale of Coal and the Inner Mongolia Purchase of Coal Contracts. Therefore, CDC and its associates should abstain from voting on the consideration and approval of the Framework Agreement for the Purchase and Sale of Coal and the Inner Mongolia Purchase of Coal Contracts at the general meeting of the Company.
DEFINITIONS
In this announcement, unless the context otherwise requires, the following expressions have the following meanings:
"associate" has the meaning ascribed to it under the Listing Rules "Beijing Datang Fuel Co." Beijing Datang Fuel Co., Ltd., details of which are set out in the section entitled "Information on the Parties to the Framework Agreements""Board" the board of Directors of the Company
"Capital Contribution Agreement" the capital contribution agreement entered into
between the Company, Beijing Datang Fuel Co. and Datang Electric Power Fuel Co. on 12 October 2011 in respect of the capital contribution and share enlargement for Beijing Datang Fuel Co., the details of which please refer to the announcement of the Company dated 12 October 2011 "CDC" China Datang Corporation, a State-owned enterprise established under the laws of the PRC and a controlling Shareholder of the Company pursuant to the Listing Rules "Coal Sales Co." Datang (Beijing) Coal Sales Co., Ltd., a wholly-owned subsidiary of China Datang Coal Industry Co., Ltd., a wholly-owned subsidiary of CDC, details of which are set out in the section entitled "Information on the Parties to the Framework Agreements"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"Director(s)" director(s) of the Company"Framework Agreements" the Framework Agreement for the Purchase and Sale of Coal, the Inner Mongolia Purchase of Coal Contracts, the Heshan Purchase and Sale of Coal Contract and the Xilinhaote Purchase and Sale of Coal Contract"Framework Agreement for the the framework agreement for the purchase andPurchase and Sale of Coal" sale of coal dated 18 April 2012 entered into between the Company and Beijing Datang Fuel Co."Group" the Company and its subsidiaries "Guiguan Heshan Power Guiguan Heshan Power Generation Co., Ltd., aGeneration Co." controlled subsidiary of Guangxi Guiguan Electric Power Co., Ltd., a controlled subsidiary of CDC, details of which are set out in the section entitled "Information on the Parties to the Framework Agreements""Heshan Purchase and Sale of the Heshan Purchase and Sale of Coal ContractCoal Contract" dated 18 April 2012 entered into between Beijing Datang Fuel Co. and Guiguan Heshan Power Generation Co."Independent Board Committee" an independent committee of the Board, comprising all the independent non-executive Directors to the appointed by the Board"Inner Mongolia Fuel Co." Inner Mongolia Datang Fuel Co., Ltd., a wholly-owned subsidiary of Beijing Datang Fuel Co., details of which are set out in the section of "Information on the Parties to the Framework Agreements""Inner Mongolia Purchase of four Inner Mongolia Purchase of Coal ContractsCoal Contracts" all dated 18 April 2012 entered into between Inner Mongolia Fuel Co. with each of (i) Tuoketuo Power Generation Co.; (ii) Tuoketuo II Power Co.; (iii) Hohhot Thermal Power Co.; and (iv) Renewable Energy Resources Co."Listing Rules" the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited"PRC" the People's Republic of China"RMB" Renminbi, the lawful currency of the PRC"Shareholder(s)" the shareholder(s) of the Company"Stock Exchange" The Stock Exchange of Hong Kong Limited"Xilinhaote Mining Co." Inner Mongolia Datang International Xilinhaote Mining Co., Ltd., a controlled subsidiary of the Company, details of which are set out in the section of "Information on the Parties to the Framework Agreements""Xilinhaote Purchase and Sale the Xilinhaote Purchase and Sale of Coalof Coal Contract" Contract dated 18 April 2012 entered into between Xilinhaote Mining Co. and Coal Sales Co."%" percent By Order of the Board Zhou Gang Secretary to the Board
Beijing, the PRC, 18 April 2012
As at the date of this announcement, the Directors are: Liu Shunda , Hu Shengmu, Cao Jingshan, Fang Qinghai, Zhou Gang, Liu Haixia, Guan Tiangang, Su Tiegang, Ye Yonghui, Li Gengsheng, Li Yanmeng*, Zhao Zunlian*, Li Hengyuan*, Zhao Jie* and Jiang Guohua*
* Independent non-executive Directors
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