Announcement

RNS Number : 2305S

Datang Intl Power Generation Co Ld

14 May 2009

 



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: 991)

ANNOUNCEMENT

On 13 May 2009, the Company entered into a Reorganisation Agreement with the existing shareholders of Yuneng Group, pursuant to which, the Company will participate in the reorganisation work of Yuneng Group through capital contribution by way of cash. Upon completion of the reorganisation, the Company will obtain 51% equity interest in Yuneng Group. The Company will also enter into the Supplemental Agreement with the existing shareholders of Yuneng Group. The Supplemental Agreement will specify terms including the final amount of capital injection by the Company to Yuneng Group and its capital injection schedule, etc. As at the date of this announcement, the final amount of the capital injection to Yuneng Group by the Company was not ascertained yet. When such amount is ascertained, the Company will classify the transaction under the Reorganisation Agreement according to the requirements of chapter 14 of the Listing Rules and will make further announcement in accordance with the requirements of the Listing Rules.

BACKGROUND

On 13 May 2009, the Company entered into a Reorganisation Agreement with the existing shareholders of Yuneng Group, pursuant to which, the Company will participate in the reorganisation work of Yuneng Group through capital contribution by way of cash. Upon completion of the reorganisation, the Company will obtain 51% equity interest in Yuneng Group for the purposes of operating and developing the power generation business and other businesses of Yuneng Group. The Company will also enter into the Supplemental Agreement with the existing shareholders of Yuneng Group. The Supplemental Agreement will specify terms including the final amount of capital injection to be made by the Company to Yuneng Group and its capital injection schedule, etc. Details of the Reorganisation Agreement are as follows:

REORGANISATION AGREEMENT

 

Date of Entering into the Reorganisation Agreement

 

13 May 2009

 

Parties to the Reorganisation Agreement

 

1.        The Company

 

2.        The existing 20 shareholders of Yuneng Group. Having made all reasonable enquiries, the Directors confirmed that the existing 20 shareholders of Yuneng Group and its ultimate beneficial owners are third parties which are independent of the Company and its connected persons (as defined under the Listing Rules) and are not connected persons of the Company.

 

Major Contents of the Reorganisation Agreement

 

1.     The parties to the Reorganisation Agreement agreed that the amount of the first portion of capital injection to be made by the Company to Yuneng Group amounts to approximately RMB1,289 million. The Company will make the aforementioned capital to Yuneng Group on an one-off basis within five working days from the date of entering into the Reorganisation Agreement.

 

2.     Commencing from the date of the payment of the first portion of the capital injection by the Company to Yuneng Group, the Company will commence its management on Yuneng Group, and will fully participate in the decision-making on the material issues of Yuneng Group.

 

3.     After entering into the Reorganisation Agreement, the Company will continue to push ahead the integration of assets of Yuneng Group. Upon the finalisation of the integration plan for the assets of Yuneng Group, the Company will adjust the amount of the capital injection to bemade to Yuneng Group according to the final audit and valuation results, and will enter into the Supplemental Agreement to specify terms including the final amount of capital injection to be made by the Company to Yuneng Group and its capital injection schedule, etc., as well as proceeding to the industry and commerce registration for the change in shareholding.

INFORMATION RELATING TO THE COMPANY

 

The Company is principally engaged in the development and operation of power plants, the sale of electricity and thermal power, and the repair, testing and maintenance of power equipment and power-related technical services, with its main service areas being in the PRC.

 

INFORMATION RELATING TO YUNENG GROUP

 

Yuneng Group is a limited liability company incorporated in Chongqing city. As at the date of the Reorganisation Agreement, its registered capital is RMB1,006.1060 million. It is a corporation with diversified operations, engaging in the core businesses of power generation from energy sources, mining and metallurgy, and the ancillary business of property development. 

 

As at 31 December 2008, on the consolidated basis of the book amount, Yuneng Group’s total assets amounted to approximately RMB12.7 billion; the total liabilities amounted to approximately RMB9.6 billion; and the net assets amounted to approximately RMB3.1 billion (the above figures are not audited).

 

REASONS FOR AND BENEFITS OF ENTERING INTO THE REORGANISATION AGREEMENT

 

As the quality and scale of the assets of Yuneng Group (especially its power generating assets) are relatively good and large, participating in the reorganisation of Yuneng Group through capital injection in order to ultimately obtain control over Yuneng Group will increase the power generation capacity of the Company and the market share of the Company in the power market of Chongqing region on the one hand, and expand the business scope of the Company on the other hand. This is in line with the Company’s strategy of “focusing on the power generation business while developing with synergy and diversifications” and is beneficial for the sustainable development of the Company. 

 

To date, the installed capacity in operation of Yuneng Group’s generating units amounted to approximately 800MW, of which the installed capacity of hydropower amounted to approximately 520MW; and the installed capacities under construction and in the preliminary phase of development amounted to approximately 1,730MW. Therefore, upon completion of the reorganisation, the installed capacity of the Company will be increased and the structure of the Company’s power generation assets will be improved.

 

The Board considers that the operation and development of Yuneng Group’s power generation project can take advantage of the growing power demand and the economic development in the Chongqing city, which in turn will enhance the overall profitability of the Company. The participation in the reorganisation work of Yuneng Group through capital contribution by the Company is in the interest of the Company and the Shareholders as a whole.

 

GENERAL MATTERS

 

As at the date of this announcement, the final amount of the capital injection to Yuneng Group by the Company was not ascertained yet. When such amount is ascertained, the Company will classify the transaction under the Reorganisation Agreement according to the requirements of chapter 14 of the Listing Rules and will make further announcement in accordance with the requirements of the Listing Rules.

 

DEFINITIONS

In this announcement, unless the context otherwise requires, the following expressions have the following meanings:

 

“A Share(s)”		the domestic ordinary share(s) of the Company with a nominal value of RMB1.00 each and are listed on the Shanghai Stock Exchange
“Board”		the board of Directors
“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
“Directors”		directors of the Company
“Domestic Shares”		ordinary shares issued by the Company, with a nominal value of RMB1.00 each, which are subscribed for or credited as paid up in Renminbi
“H Share(s)”		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
“Hong Kong”		the Hong Kong Special Administrative Region of the PRC
“Listing Rules”		The Rules Governing the Listing of Securities on the Stock Exchange
“London Stock Exchange”		The London Stock Exchange Limited
“PRC”		the People’s Republic of China
“Reorganisation Agreement”		the reorganisation agreement dated 13 May 2009 entered into by the Company and the existing shareholders of Yuneng Group
“RMB”		Renminbi, the lawful currency of the PRC
“Shareholder(s)”		the holder(s) of the Share(s)
“Shares”		the ordinary shares issued by the Company with a nominal value of RMB1.00 each, comprising Domestic Shares and H Shares
“Stock Exchange”		The Stock Exchange of Hong Kong Limited
“Supplemental Agreement”		the supplemental agreement to the Reorganisation Agreement to be entered into by the Company and the existing shareholders of Yuneng Group. The Company will obtain 51% equity interest in Yuneng Group upon entering into the Supplemental Agreement and the completion of the reorganisation of Yuneng Group
“Yuneng Group”		Yuneng (Group) Company Limited is a limited liability company incorporated in Chongqing city. Its registered capital is RMB1,006.1060 million as at the date of entering into the Reorganisation Agreement. It is a corporation with diversified operations, engaging in the core businesses of power generation from energy sources, mining and metallurgy, and the ancillary business of property development
“%”		per cent

 

By Order of the Board 

Zhou Gang    

Secretary to the Board

 

Beijing, the PRC, 13 May 2009

 

As at the date of this announcement, the Directors of the Company are:

 

Zhai Ruoyu, Hu Shengmu, Cao Jingshan, Fang Qinghai, Zhou Gang, Liu Haixia,Guan Tiangang, Su Tiegang, Ye Yonghui, Li Gengsheng, Xie Songlin*, Liu Chaoan*, Yu Changchun*, Xia Qing* and Li Hengyuan*.

 

* Independent non-executive Directors

 

 

 

END

 

 

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