DATANG INTERNATIONAL POWER GENERATION COMPANY LD: Connected Transaction

DATANG INTERNATIONAL POWER GENERATION COMPANY LD: Connected Transaction
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                                  
                      Connected Transaction                             

Equity Transfer Agreement                                                      


                                                                           
On 5 February 2013, Yuneng Group, Dingtai Power and Tuoyuan Industry, all being
wholly-owned subsidiaries of the Company, entered into the Equity Transfer     
Agreement with China Water Resources. Pursuant to the agreement, China Water   
Resources agreed to acquire 100% of the equity interests of Yuneng Industrial  
from the Transferors at an aggregate consideration of approximately RMB538.5893
million.                                                                        
                                                                           
LISTING RULES IMPLICATIONS                                                      
                                                                           
As at the date of this announcement, CDC is the controlling Shareholder of the 
Company, which together with its subsidiaries held approximately 34.71% of the 
issued share capital of the Company. China Water Resources is a wholly-owned   
subsidiary of CDC. Accordingly, China Water Resources is a connected person of 
the Company and the Equity Transfer contemplated under the Equity Transfer     
Agreement constitutes a connected transaction of the Company.                   
                                                                           
As each of the applicable percentage ratios (as defined in Rule 14.07 of the   
Listing Rules) in respect of the Equity Transfer is higher than 0.1% but lower 
than 5%, the Equity Transfer is only subject to the reporting and announcement 
requirements under Rules 14A of the Listing Rules and does not require the     
approval by the independent Shareholders of the Company under Chapter 14A of   
the Listing Rules.                                                              
BACKGROUND 
The Equity Transfer is for the purpose of complying with the relevant
requirements made by the regulatory authorities on the Company's implementation
of refinancing, which is conducive to the implementation of refinancing plans
of the Company. 
On 20 August 2012, the twenty-eighth meeting of the seventh session of the
Board considered and approved the sale of the equity interest of Yuneng
Resources to be made by way of public tender and the relevant matters in
relation to the tender and transfer. 
On 5 February 2013, Yuneng Group, Dingtai Power and Tuoyuan Industry, all being
wholly-owned subsidiaries of the Company, entered into the Equity Transfer
Agreement with China Water Resources. Pursuant to the agreement, China Water
Resources agreed to acquire 100% of the equity interests of Yuneng Industrial
from the Transferors at an aggregate consideration of approximately RMB538.5893
million. 
EQUITY TRANSFER AGREEMENT 
Date 
5 February 2013 
Parties 
Transferors:        Yuneng Group, Dingtai Power and Tuoyuan Industry 
Transferee:         China Water Resources 
Target of transfer: 100% of the equity interest of Yuneng Industrial 
MAJOR DETAILS OF THE EQUITY TRANSFER AGREEMENT 
 1. According to the unqualified audit report of Yuneng Industrial (RSM China 


    Huachuan Specialized Audit (2012) No. 161) issued by the Sichuan branch of
    RSM China Certified Public Accountants (A special general partnership), as
    at 31 December 2011, the base day of audit, total assets of Yuneng
    Industrial amounted to approximately RMB1,187.6828 million; owners' equity
    amounted to approximately RMB332.8787 million; operational revenue amounted
    to approximately RMB17.8413 million; net profit amounted to approximately
    RMB11.2689 million.
     2. According to the asset valuation report issued by Beijing China Alliance
    Appraisal Co., Ltd., an independent valuer of the Company, (China Alliance
    Valuation Report (2012) No. 251) adopting cost method, as at 31 December
    2011, the base day of the valuation, the assessed value of the net assets
    of Yuneng Industrial amounted to RMB538.5892 million, representing an
    increase in assessed value of RMB205.7105 million when comparing with the
    book value of net assets of RMB332.8787 million, representing an
    appreciation of value of approximately 61.8%.
        The results of the valuation is the conclusion about the value of the net
    assets of Yuneng Industrial which was arrived at by the valuation 
    institution adopting cost method after comparing and analyzing the audit 
    report, accounting statements and other financial information of Yuneng 
    Industrial, and the available historical financial information of Yuneng 
    Industrial and considering that the assets of Yuneng Industrial have been 
    or assumed to be in the status of continuous utilisation taking into 
    account the established history of Yuneng Industrial, and in accordance 
    with relevant laws, rules, principles of assets valuation and necessary 
    valuation procedures.

 3. Taking into account the assessed value of the net assets of Yuneng
    Industrial as at 31 December 2011, China Water Resources agreed to acquire
    100% of the equity interest of Yuneng Industrial at the listed value at
    BEE, i.e. RMB538.5893 million.
     4. Yuneng Industrial has not engaged in any forms of guarantee, including but
    not limited to pledging of the relevant assets and equity, or any
    limitations or obligations that will hinder the Equity Transfer or the
    exercising of rights by equity owners. Yuneng Industrial has not undergone
    any seizure or any injunctive measures by authorities.
     5. China Water Resources agreed to pay the consideration in one lump sum after
    deducting the Deposit by transferring the relevant amount into the
    designated account of BEE within five working days after entering into the
    Equity Transfer Agreement.
     6. China Water Resources agreed to assist Yuneng Industrial to repay the
    remaining amount of an entrusted loan of RMB412 million to Yuneng Group
    within 30 days after the issue of the Transaction Voucher by BEE. In the
    event that Yuneng Industrial failed to repay such entrusted loan to Yuneng
    Group within the said period, China Water Resources agrees to raise fund to
    repay the entrusted loan on behalf of Yuneng Industrial.
     7. China Water Resources agreed to assist Yuneng Industrial to pay the
    dividend payable in the sum of RMB174.9546 million within 30 days after the
    issuance of Transaction Voucher by BEE.
    Conditions Precedent

The Equity Transfer under the Equity Transfer Agreement is subject to the
following conditions:

 1) The Transferors have completed the public tender procedures in BEE for the
    Equity Transfer contemplated under the Equity Transfer Agreement in
    accordance with the requirements under relevant laws, rules and policies;
     2) China Water Resources has obtained the relevant approvals in respect of the
    Equity Transfer in accordance with laws and its articles of association;
    and
     3) The parties have signed and affixed their respective company seals to the
    Equity Transfer Agreement.
    INFORMATION OF YUNENG INDUSTRIAL

Yuneng Industrial was incorporated on 19 September 1992 with a registered
capital of RMB300 million and its legal representative is Wang Daoyi. The scope
of its principal businesses covers integrated urban construction and
development (Grade B), hi-tech development for chemical and electronic
products, development of electric power resources as well as sales of
electrical machinery and equipment, building and decoration materials
(excluding hazardous chemicals). The equity holding structure of Yuneng
Industrial is as follows: 40.83% of the equity interest was held by Yuneng
Group, 30% of the equity interest was held by Dingtai Power and 29.17% of the
equity interest was held by Tuoyuan Industry.

As at 30 November 2012, the total amount of entrusted loan of Yuneng Industrial
which Yuneng Group provided guarantee amounted to RMB427 million. As at the
date of this announcement, Yuneng Industrial had repaid RMB15 million of the
entrusted loan.

As at 30 November 2012, total dividend payable by Yuneng Industrial amounted to
RMB174.9546 million, in which dividend payable to Yuneng Group amounted to
RMB71.3084 million, dividend payable to Dingtai Power amounted to RMB 52.1958
million and dividend payable to Tuoyuan Industry amounted to RMB50.5717
million.

The 100% of the equity interest in Yuneng Industry was publicly listed on BEE
for tender on 29 December 2012. As only China Water Resources submitted tender
during the listing period, China Water Resources won the tender for the 100% of
the equity interest of Yuneng Industrial.

For the year ended 31 December 2011, net profits before and after taxation of
Yuneng Industrial amounted to approximately RMB203.1900 million and RMB185.6179
million, respectively (the above-said figures have been audited).

For the year ended 31 December 2012, net profits before and after taxation of
Yuneng Industrial amounted to approximately RMB212.6399 million and RMB166.6418
million, respectively (the above-said figures have not been audited).

After completion of the Equity Transfer, Yuneng Industrial will cease to be a
subsidiary of the Company.

PROCEEDS FROM THE EQUITY TRANSFER

Comparing with the fair value of the owners' equity of the parent company
attributable to Yuneng Industrial as at the base day of valuation, 31 December
2011, the Company expects that it will record a gain of approximately
RMB33.7644 million resulting from the Equity Transfer under the Equity Transfer
Agreement.

REASONS FOR AND BENEFITS OF ENTERING INTO THE EQUITY TRANSFER AGREEMENT

The Equity Transfer is for the purpose of complying with the relevant
requirements made by the regulatory authorities on the Company's implementation
of refinancing, which is conducive to the implementation of refinancing plans
of the Company. Considering that Yuneng Industrial is principally engaged in
real estate development, which is not the major scope of business of the
Company, the Equity Transfer will not constitute substantial harm to the major
business and financial condition of the Company. The sales proceeds of the
Equity Transfer is intended to be used as replenishment of general working
capital of the original equity holders of Yuneng Industrial.

None of the Directors has any material interest in the transaction. The
Directors (including independent non-executive directors) are of the view that
the terms of the Equity Transfer Agreement were negotiated by the parties on
arm's length basis and determined on normal commercial terms, and are fair and
reasonable and in the interests of the Company and the Shareholders as a whole.

INFORMATION OF THE PARTIES

 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 being in the PRC.
     2. Yuneng Group, a wholly-owned subsidiary of the Company, is principally
    engaged in, with it's own capital, the investment and management of
    projects in relation to electricity, mineral resources, telecom,
    communication and tourism; real estate development; management services of
    construction engineering; corporate management consultation services;
    production, development and sale of electrical machinery;
    construction-related businesses; sale of sports equipment, ordinary
    machinery and equipment for mineral products, hardware, electric apparatus,
    electronic products, lubricants, household electrical appliances,
    furniture, computer and parts, communication apparatus, metallic materials,
    cement products, chemical products, construction materials, decoration
    materials, and maintenance of computer systems.
     3. Dingtai Power, a wholly-owned subsidiary of the Company, is principally
    engaged in the production, development and sale of electricity, electrical
    appliances and machinery and structural ceramics; sale of hardware and
    electrical apparatus, non-ferrous metal, auto parts, motorcycle parts,
    decoration materials and general groceries; import and export of various
    merchandise and technology, excluding those restricted operation operated
    by companies or banned from import or export by the State; electrical
    technology consultation, commercial information consultation.
     4. Tuoyuan Industry, a wholly-owned subsidiary of the Company, is principally
    engaged in hospitality, catering (limited to qualified branches only);
    electricity development and generation; sale of electricity, electrical
    appliances, machinery and equipment, computer and parts.
     5. China Water Resources is principally engaged in domestic and international
    freight forwarding; import and export business; investment in water
    conservancy and electricity projects and other enterprises; sale of ferrous
    metals, non-ferrous metals, furnace charging materials, building materials,
    chemical materials (excluding hazardous chemicals), rubber, non-metallic
    materials, mechanical and electrical equipment, apparatus and metres,
    electronic products, electrical products, complete sets of electrical
    equipment, complete sets of water conservancy equipment and spare parts,
    mechanical equipment and auto sale; technology consulting, technology
    services and information services in relation to the foregoing; project
    supervision; technology development for pipeline projects; and acting as
    agent for invitation of tenders for equipment for technological
    transformation and construction projects.
    LISTING RULES IMPLICATIONS

As at the date of this announcement, CDC is the controlling Shareholder of the
Company, which together with its subsidiaries held approximately 34.71% of the
issued share capital of the Company. China Water Resources is a wholly-owned
subsidiary of CDC. Accordingly, China Water Resources is a connected person of
the Company and the Equity Transfer contemplated under the Equity Transfer
Agreement constitutes a connected transaction of the Company.

As each of the applicable percentage ratios (as defined in Rule 14.07 of the
Listing Rules) in respect of the Equity Transfer under the Equity Transfer
Agreement is higher than 0.1% but lower than 5%, the Equity Transfer
contemplated under the Equity Transfer Agreement is only subject to the
reporting and announcement requirements under Rules 14A of the Listing Rules
and do not require the approval by the independent Shareholders of the Company
under Chapter 14A of the Listing Rules.

DEFINITIONS

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

"BEE"                 China Beijing Equity Exchange                            


                                                                           
"Board"               the board of Directors of the Company                     
                                                                           
"CDC"                 China Datang Corporation, a State-owned enterprise        


                      established under the laws of the PRC and is a           
                      controlling shareholder of the Company pursuant to the   
                      Listing Rules                                            


                                                                           
"China Water          China National Water Resources & Electric Power Materials
Resources"            & Equipment Co., Ltd., the details of which is set out in 
                  the section headed "INFORMATION OF THE PARTIES"           
                                                                           
"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"    has the meaning ascribed to it under the Listing Rules    
                                                                           
"Connected            has the meaning ascribed to it under the Listing Rules   
transaction"                                                                    
                                                                           
"Deposit"             an amount of RMB100 million, which is the deposit paid by 


                      China Water Resources to the designated account of BEE   
                      before entering into the Equity Transfer Agreement under 
                      the request of the Transferors and BEE for the purpose of
                      guaranteeing the acceptance of transfer and demonstrating
                      its assets and credit position and ability to fulfill the
                      obligations under the Equity Transfer Agreement          


                                                                           
"Dingtai Power"       Chongqing Dingtai Power (Group) Company Limited, a        


                      wholly-owned subsidiary of the Company, "INFORMATION OF  
                      THE PARTIES"                                             


                                                                           
"Director(s)"         the director(s) of the Company                            
                                                                           
"Equity Transfer"     the transfer of the 100% of the equity interest of Yuneng 


                      Industrial from Yuneng Group, Dingtai Power and Tuoyuan  
                      Industry to China Water Resources as contemplated under  
                      the Equity Transfer Agreement                            


                                                                           
"Equity Transfer      the equity transfer agreement dated 5 February 2013      
Agreement"            entered into between Yuneng Group, Dingtai Power, Tuoyuan 


                      Industry and China Water Resources in relation to the    
                      Equity Transfer                                          


                                                                           
"Listing Rules"       The Rules Governing the Listing of Securities on the      
                  Stock Exchange                                            
                                                                           
"PRC"                 the People's Republic of China                            
                                                                           
"RMB"                 Renminbi, the lawful currency of the PRC                  
                                                                           
"Shareholder(s)"      the holder(s) of the share(s) of the Company              
                                                                           
"Stock Exchange"      The Stock Exchange of Hong Kong Limited                   
                                                                           
"Transferors"         Yuneng Group, Dingtai Power and Tuoyuan Industry          
                                                                           
"Transaction Voucher" the transaction voucher issued by the BEE evidencing that 


                      it has completed the transaction in accordance with the  
                      relevant transaction rules                               


                                                                           
"Tuoyuan Industry"    Chongqing Tuoyuan Industry Co., Ltd., a wholly-owned      


                      subsidiary of the Company, the details of which is set   
                      out in the section headed "INFORMATION OF THE PARTIES"   


                                                                           
"Yuneng Group"        Yuneng (Group) Co. Ltd., a wholly-owned subsidiary of the 


                      Company, the details of which is set out in the section  
                      headed "INFORMATION OF THE PARTIES"                      


                                                                           
"Yuneng Industrial"   Chongqing Yuneng Industrial Group Co., Ltd., a            


                      wholly-owned subsidiary of the Company, the details of   
                      which is set out in the section headed "INFORMATION OF   
                      YUNENG INDUSTRIAL"                                       


                                                                           
"%"                   per cent                                                  


                                                          By Order of the Board
                                                                      Zhou Gang
                                                         Secretary to the Board

Beijing, the PRC, 6 February 2013

As at the date of this announcement, the Directors 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- Feb/08/2013 07:00 GMT


 
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