DATANG INTERNATIONAL POWER GENERATION COMPANY LD: IFA's Advice on Franchising Contract Term

DATANG INTERNATIONAL POWER GENERATION COMPANY LD: IFA's Advice on Franchising 
Contract Term
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
                   INDEPENDENT FINANCIAL ADVISER'S ADVICE 
                     ON TERM OF THE FRANCHISING CONTRACT

BACKGROUND

Reference is made to the announcement of Datang International Power
Generation Co., Ltd. (the "Company") dated 2 November 2012
(the "Announcement") in relation to, among others, the Franchising
Contract. Capitalized terms used in this announcement shall have the
same meanings as defined in the Announcement unless the context required
otherwise.

As set out in the Announcement, the franchise period under the
Franchising Contract is the same as the operating period of the power
generation facilities at which the franchise project is located. Since
the Desulfurization Assets are the supporting and ancillary facilities
of the coal-fired power generating units, the franchise period of the
Desulfurization Assets are the same as the operating periods of their 
corresponding power generating facilities. The term of the Franchising
Contract is therefore expected to exceed three years. 

Rule 14A.35(1) of the Listing Rules provides, in relation to non-exempt
continuing connected transactions, that, inter alia, under special 
circumstances where the nature of the transaction requires the agreement
to be of a duration longer than three years, an independent financial
adviser to the Company will be required to explain why a longer period
for the agreement is required and to confirm that it is normal business
practice for agreements of such type to be of such duration. The Board,
accordingly, has appointed Mizuho Securities Asia Limited 
("Mizuho Securities") as the independent financial adviser to provide 
advice in relation to the franchise period of the Desulfurization Assets
under the Franchising Contract.

OPINION OF INDEPENDENT FINANCIAL ADVISER

Mizuho Securities opines that on the basis that the Desulfurization Assets
are the supporting and ancillary facilities of the coal-fired power
generating units, the Desulfurization Assets will operate with the 
coal-fired power generating units to achieve flue gas desulfurization. 
As such, it is reasonable that the franchise period of the Desulfurization
Assets is the same as the operating period of the corresponding power
generation facilities under the Franchising Contract. 

Since the aforesaid coal-fired power generating units associated with
the Desulfurization Assets are designed and built to operate for a 
relatively long period (typically for more than three years), Mizuho
Securities has discussed with the management of the Company and concurs
with its view that it is reasonable for the Company to have an expected
franchise period to exceed three years. 

In addition, the Company has provided Mizuho Securities a franchising 
contract template which it has confirmed to be widely circulated in the 
industry for the purpose of the compilation of franchising contract in 
the power industry in the PRC. Mizuho Securities has reviewed such
franchising contract template, and noted that the proposed franchising
period of the desulfurization assets is the same as the operating period
of the corresponding power generating facilities.

Mizuho Securities has also reviewed an announcement of a PRC listed 
power generation company and noted that the power generation company 
has also entered into a franchising contract in respect of flue gas 
desulfurization with a connected party. The period of such franchising
contract is also the same as the operating period of the power generating
facilities under the franchising contract.  

Having considered the principal factors and reasons described above, 
Mizuho Securities considers that it is normal business practice for the
Franchising Contract to be of the same duration of the operating period
of the coal-fired power generating units for which it is associated with.
                                                  By Order of the Board  
                                                        Zhou Gang     
                                                  Secretary to the Board 


Beijing, the PRC, 22 November 2012

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

Liu Shunda, Hu Shengmu, Cao Jingshan, Fang Qinghai, Zhou Gang, Liu Haixia,
Guan Tiangang, Mi Dabin, Ye Yonghui, Li Gengsheng, Li Yanmeng*, 
Zhao Zunlian*, Li Hengyuan*, Zhao Jie*, Jiang Guohua*

* Independent non-executive Directors



END

-0- Nov/22/2012 12:11 GMT


 
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