Datang Intl H Regulatory News (DAT)

26 Jan 2006 07:00

Datang Intl Power Generation Co Ld26 January 2006 The Stock Exchange of Hong Kong Limited takes no responsibility for thecontents of this announcement, makes no representation as to its accuracyor completeness and expressly disclaims any liability whatsoever for anyloss howsoever arising from or in reliance upon the whole or any part ofthe 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: 991) MAJOR TRANSACTION Investment Agreement The Board would like to announce that on 25 January 2006, the Companyentered into the Investment Agreement with Guangdong Nuclear Power for thepurposes of constructing and operating the Ningde Nuclear Power Project byestablishing Ningde Nuclear Power Company. Pursuant to the InvestmentAgreement, the Company and Guangdong Nuclear Power Investment agreed tocontribute to the registered capital of Ningde Nuclear Power Company in theproportion of 49% and 51%, respectively. Major Transaction According to the Listing Rules, as the consideration ratio (as defined inRule 14.07 of the Listing Rules) is more than 25%, the Investment Agreementconstitutes a major transaction of the Company. The Investment Agreement istherefore subject to the notification, publication and shareholders'approval requirements as set out in Rules 14.34 to 14.40 of the ListingRules. A circular containing details of the Investment Agreement, together with anotice of the EGM, will be despatched to the Shareholders as soon aspracticable. INVESTMENT AGREEMENT Date 25 January 2006 Parties (i) the Company; and (ii) Guangdong Nuclear Power Investment. Major Terms Amount of total investment and registered capital of Ningde Nuclear PowerCompany Pursuant to the Investment Agreement, the Company and Guangdong NuclearPower Investment agreed to contribute to the registered capital of NingdeNuclear Power Company in the proportion of 49% and 51%, respectively, forthe purposes of constructing and operating the Ningde Nuclear PowerProject. The total investment amount of the Ningde Nuclear Power Project is expectedto be approximately RMB23,442,000,000 (equivalent to approximatelyHK$22,540,000,000), which is subject to the verification by the relevantgovernmental authorities in the PRC, 20% of which is the registered capitalof Ningde Nuclear Power Company, i.e. approximately RMB4,688,000,000(equivalent to approximately HK$4,508,000,000). Pursuant to the InvestmentAgreement, the initial registered capital of Ningde Nuclear Power Companyis RMB200,000,000 (equivalent to approximately HK$192,308,000), 49% and 51%of which will be contributed in cash by the Company and Guangdong NuclearPower Investment, respectively, after the signing of the InvestmentAgreement. The Investment Agreement does not stipulate a time limit withinwhich both parties will contribute to the initial registered capital ofNingde Nuclear Power Company. The Company's contribution to the registeredcapital of Ningde Nuclear Power Company will be funded by internalresources. As at the date of this announcement, no contribution to theregistered capital of Ningde Nuclear Power Company has been made by theparties to the Investment Agreement. The parties to the Investment Agreement agreed to procure the increase ofregistered capital of Ningde Nuclear Power Company in stages in line withthe construction progress of Ningde Nuclear Power Project and suchincreased portion of registered capital of Ningde Nuclear Power Companywill be contributed by the Company and Guangdong Nuclear Power Investmentin the same proportion as their respective contribution to the said initialregistered capital. According to the Investment Agreement, all funds required for theconstruction of the Ningde Nuclear Power Project will be funded by theregistered capital of Ningde Nuclear Power Company and third partyborrowings in the PRC and in which case, each of the Company and GuangdongNuclear Power Investment will severally guarantee such borrowings inproportion to their respective capital contribution in Ningde Nuclear PowerCompany if so required. In the event of any further capital contribution orguarantee of borrowings by the Company, it will comply with the relevantrequirements under the Listing Rules if and when necessary. Effective date of the Investment Agreement The Investment Agreement will become effective when the respective party tothe Investment Agreement has obtained their internal approvals for theinvestments under the Investment Agreement which, apart from the approvalby the Shareholders pursuant to the Listing Rules, have all been obtainedas at the date of this announcement. The establishment of Ningde Nuclear Power Company Pursuant to the Investment Agreement and in accordance with the Company Lawof the PRC, the parties to the Investment Agreement will apply to the localstate administration of industry and commerce authority of the PRC for theregistration and business license of Ningde Nuclear Power Company within 90days from the effective date of the Investment Agreement. If Ningde NuclearPower Company is not established within 180 days from the signing of theInvestment Agreement by the parties thereto, the Investment Agreement willbe automatically discharged unless the parties thereto has entered intofurther agreement. Upon the establishment of Ningde Nuclear Power Company,it will be owned as to 49% by the Company and 51% by Guangdong NuclearPower Investment and therefore will not be treated as a subsidiary of theCompany. Other major terms Pursuant to the Investment Agreement, if the relevant verification noticefor Ningde Nuclear Power Project from the relevant authorities in the PRChave not been granted after three years from the establishment of NingdeNuclear Power Company, the obligations of the contributions to theregistered capital to Ningde Nuclear Power Company by parties thereto willbe suspended from the last date of the said three year period until thedate when such notice is granted. INFORMATION RELATING TO THE COMPANY The Company is principally engaged in the development and operation ofpower plants, the sale of electricity and thermal power, and the repair,testing and maintenance of power equipment and power related technicalservices, with its present main operation in the PRC. INFORMATION RELATING TO GUANGDONG NUCLEAR POWER INVESTMENT The principal business of Guangdong Nuclear Power Investment includes theinvestment on nuclear power project, and import and export of goods andtechnical services relating to nuclear power generation, with its currentmain operations in Guangdong province, the PRC. INFORMATION RELATING TO THE NINGDE NUCLEAR POWER COMPANY Ningde Nuclear Power Company will be established for the purposes ofconstructing and operating Ningde Nuclear Power Project. The Ningde NuclearPower Project, consisting of two 1000 MW level nuclear power generatingunits, will be located in Qinyu Town, Fuding County, Ningde City, FujianProvince, the PRC. The project proposal for the Ningde Nuclear PowerProject has been submitted to the National Development and ReformCommission, the PRC. The commencement date of the construction of NingdeNuclear Power Project would be determined after the verification of suchproject by the relevant authorities in the PRC. The commencement of theoperation of each of the nuclear power generating unit of Ningde NuclearPower Project is subject to the approval of the relevant environmentalauthorities in the PRC. The two power generating units of Ningde NuclearPower Project are expected to commence operation in October 2012 and June2013, respectively. REASONS FOR AND BENEFITS OF ENTERING INTO THE INVESTMENT AGREEMENT The mismatch of power demand and supply in Fujian Province has emerged as aresult of continuing growth in demand and the limited and inadequate coalresources within such province. The investment and development of nuclearpower project in Fujian Province is in line with the State's power policiesof "diligently furthering the development of nuclear power" anddiversifying the means of power generation. The Investment Agreementrepresents an important move of the Company to implement the strategy ofdiversification of the means of power generation which will in turnalleviate the pressure in respect of environmental compliance and fuelsupply on the Company as a whole. The Board believes that the powergenerating units constructed in Ningde Nuclear Power Project could takeadvantage of the growing demand for electricity in Fujian Province, whichin turn would enhance the operating profits of the Company as a whole. Inview of the above, the Directors (including the independent non-executiveDirectors) believe that the terms of the Investment Agreement are fair andreasonable and in the interests of the Shareholders as a whole. MAJOR TRANSACTION According to the Listing Rules, as the consideration ratio (as defined inRule 14.07 of the Listing Rules) is more than 25%, the Investment Agreementconstitutes a major transaction of the Company. The Investment Agreement istherefore subject to the notification, publication and shareholders'approval requirements as set out in Rules 14.34 to 14.40 of the ListingRules. To the best of the Directors' knowledge, information and beliefhaving made all reasonable enquiry, each of Guangdong Nuclear PowerInvestment and its ultimate beneficial owner is a third party who is notconnected person of the Company and is independent of the Company andconnected persons of the Company. DESPATCH OF CIRCULAR A circular containing, among other things, further information on theInvestment Agreement, together with a notice of the EGM, will be despatchedto the Shareholders as soon as practicable. DEFINITIONS In this announcement, the following expressions have the meanings set outbelow unless the context otherwise requires: "Board" the board of Directors"Company" Datang International Power Generation Co., Ltd. (Chinese Characters), a sino-foreign joint stock limited company incorporated in the PRC on 13 December 1994, the H Shares are listed on the Stock Exchange and the London Stock Exchange"connected has the meaning ascribed to it in the Listing Rulesperson""Director(s)" the director(s) of the Company"Domestic ordinary shares issued by the Company, with a nominalShares" value of RMB1.00 each, which are subscribed for or credited as paid up in Renminbi"EGM" the extraordinary general meeting of the Company to be held to consider and, if thought fit, to approve the Investment Agreement"Guangdong Guangdong Nuclear Power Investment Company LimitedNuclear Power (Chinese Characters), a limited liability companyInvestment" incorporated in the PRC, whose principal business includes the investment on nuclear power project, and import and export of goods and technical services relating to nuclear power generation, with its current main operations in Guangdong province, the PRC"H Shares" the overseas listed foreign shares of the Company with a nominal value of RMB1.00 each and are listed on the Stock Exchange and the London Stock Exchange"HK$" Hong Kong dollar(s), the lawful currency of Hong Kong"Hong Kong" the Hong Kong Special Administrative Region of the PRC"Investment the investment agreement dated 25 January 2006 enteredAgreement" into between the Company and Guangdong Nuclear Power Investment in respect of the establishment of Ningde Nuclear Power Company"Listing Rules Governing the Listing of Securities on the StockRules" Exchange"London Stock The London Stock Exchange LimitedExchange""MW" Megawatts"Ningde Nuclear Ning De Nuclear Power Company, Limited (ChinesePower Company" Characters)"Ningde Nuclear Ningde Nuclear Power Project which is planned to consistPower Project" of two 1000MW level nuclear power generating units"PRC" the People's Republic of China"RMB" Renminbi, the lawful currency of the PRC"Share(s)" the ordinary share(s) of the Company with a nominal value of RMB1.00 each, comprising Domestic Shares and H Shares"Shareholder(s) the holder(s) of the Share(s)""Stock The Stock Exchange of Hong Kong LimitedExchange""%" per cent. By Order of the Board Yang Hongming Company Secretary Beijing, the PRC, 25 January 2006 As at the date of this announcement, the Directors are: Zhai Ruoyu, Zhang Yi, Hu Shengmu, Fang Qinghai, Yang Hongming, Liu Haixia,Guan Tiangang, Su Tiegang, Ye Yonghui, Tong Yunshang, Xie Songlin*, XuDaping*, Liu Chaoan*, Yu Changchun* and Xia Qing* * independent non-executive Directors For the purpose of this announcement, HK$1.00 is equivalent to RMB1.04. This information is provided by RNS The company news service from the London Stock Exchange