Sdic Power. Regulatory News (SDIC)

SDIC Power Holdings CO., LTD.  

(GDR under the symbol: "SDIC")

NOTICE OF THE 2022 SEVENTH EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that the 2022 Seventh Extraordinary General Meeting of SDIC Power Holdings CO., LTD. will be held at Room 207, No.147 Xizhimen Nanxiao Street, Xicheng District, Beijing, the PRC, on Tuesday 13 December 2022 at 14:00 p.m., for the purpose of considering, and if thought fit, passing the following resolution.

ORDINARY RESOLUTIONS

1. To consider and approve the Proposal to Provide Guarantees for NSHE

The Board of Directors of SDIC Power Holdings CO., LTD.

November 24, 2022

The resolutions hereunder contain the English translation of the Chinese version of "Meeting materials for the 2022 Seventh Extraordinary General Meeting" as published on the website of the Shanghai Stock Exchange, and are provided for your reference only. In case of discrepancy between the Chinese version and the English version, the Chinese version shall prevail.

Proposal I

SDIC Power Holdings Co., Ltd.

Proposal to Provide Guarantees for NSHE

Dear shareholders and shareholders' representatives,

SDIC Power Holdings Co., Ltd. (hereinafter referred to as SDIC) plans to provide its indirectly controlled subsidiary PT NORTH SUMATERA HYDRO ENERGY (hereinafter referred to as NSHE) with the joint liability guarantee not exceeding USD 1,251 million. The details are as follows:

I. Overview of the Guarantee

SDIC's indirectly controlled subsidiary NSHE is mainly responsible for the construction and operation of 510MW Batang Toru Hydropower Project. As of now, the Project is at the early construction stage. Through financing comparison and selection, SDIC eventually adopts the loan scheme with Export-Import Bank of China as the leader of the syndicate. According to the loan scheme of the syndicate, SDIC is required to provide full-amount whole-process joint liability guarantee for the financing of Batang Toru Project, with the guarantee period not more than 18 years and guaranteed amount not exceeding USD 1,251 million.

NSHE's minority shareholders Pembangkitan Jawa Bali Investment (hereinafter referred to as PJBI) and Asia Hydria Pte. Ltd (hereinafter referred to as Asia Hydria) hold 25% and 5.0025% of the shares respectively. PJBI and Asia Hydria do not provide guarantee for NSHE.

II. Basic Information of the Guaranteed Party

(I) Basic information of the guaranteed party

NSHE was established on April 30, 2008. It was registered at Jakarta, with the registered address at Jl.Dharmawangsa VII No. 7 Jakarta 12160, Indonesia, and the main office address at Prapanca Raya Street No.16, Kebayoran Baru, South Jakarta, Indonesia. As of October 2022, its registered capital is USD 315 million. NSHE is mainly engaged in power business, with its operation scope primarily covering hydropower plant facilities.

As of December 31, 2021, the financial data of NSHE is as follows: total assets USD 416 million, total liabilities USD 69 million, net assets USD 347 million; in 2021, the operating revenue is USD 96 million and the net profit is USD 15 million.

As of September 30, 2022, the financial data of NSHE is as follows: total assets USD 614 million, total liabilities USD 244 million, net assets USD 370 million; in 2022, the operating revenue is USD 144 million and the net profit is USD 23 million.

(II) Relation between the guaranteed party and SDIC

The shareholders of the company are PT.Dharma Hydro Nusantara (shareholding proportion 52.82%), PT.Pembangkitan Jawa Bali Investasi (shareholding proportion 25%), and Fareast Green Energy Pte. Ltd. (shareholding proportion 22.18%).

Details of NSHE equity structure is shown in the figure below:

 III. Main Contents of Guarantee Agreement

Guarantee method: joint liability guarantee.

Guarantee type: Credit guarantee.

Guarantee period: Not more than 18 years.

Guaranteed amount: Not exceeding USD 1,251 million.

Contents of guarantee: For the purpose of financial closure, timely completion and commercial operation of Batang Toru Project, SDIC plans to provide NSHE with joint liability guarantee.

Whether other shareholders provide any guarantee and guarantee form: None.

Counter guarantee and its from: PJBI takes conditional equity pledge and share transfer agreement as the counter guarantee measures and Asia Hydria puts its equity in pledge under SDIC as the counter guarantee.

Guarantee fee: NSHE plans to pay SDIC an annual guarantee fee not less than 0.6% of the guaranteed amount each year.

IV. Necessity and Rationality of Guarantee

Investment in and construction of Batang Toru Project, a key project of Indonesian government with strategic significance, comply with the Belt and Road Initiative and the green energy development trend Based on core requirements of the loan syndicate, the full-amount whole-process guarantee is the prerequisite for financial closure of Batang Toru Project.

The political risk in Indonesia is small and the cash flow is stable after the completion of Batang Toru Project. Moreover, according to the international practice, refinancing is generally conducted for overseas projects after they are put into operation for power generation to reduce the loan interest rate and the guarantee risk of the parent company. Regarding this guarantee, PJBI takes conditional equity pledge and share transfer agreement as the counter guarantee measures and Asia Hydria puts it equity in pledge under SDIC as the counter guarantee. Due to substantial difficulty in the realization of overseas pledge, the bank does not accept the guarantee from overseas shareholders and therefore the other shareholders do not provide guarantee based on shareholding proportion. The project company has carried out assessment of the equity value and the small shareholders have undertaken to provide counter guarantee, so the interest of the listed company can be guaranteed. In view of the above situation, the risk of guarantee for NSHE is controllable and the guarantee is not detrimental to the interests of the listed company and the shareholders.

V. Accumulative Number of External Guarantees and Overdue Guarantees

As of the date of announcement disclosure, the balance of external guarantees of SDIC (including guarantees provided to the controlled subsidiaries) is 1,602.01 million yuan, and the balance of guarantees provided to the controlled subsidiaries (excluding the amount of this guarantee) is 1,319.09 million yuan, accounting for 3.11% and 2.56% of SDIC's latest audited owner's equity attributable to the parent company respectively.

This guarantee proposal is hereby submitted to the general meeting for approval; the chairman or his/her authorized person is authorized to modify, submit, report, sign and execute legal documents related to this guarantee within the guaranteed amount; the chairman or his/her authorized person is authorized to handle other matters of this guarantee.

The above proposal has been deliberated and approved at the 4th meeting of the 12th Board of Directors on November 24, 2022, and is hereby submitted to the shareholders and shareholders' representatives for deliberation and approval.

Please deliberate on the above proposal.