Announcement on the Provision

RNS Number : 9736H

Datang Intl Power Generation Co Ld

12 November 2008

 



DATANG INTERNATIONAL POWER GENERATION CO., LTD.

       (a sino-foreign joint stock limited company incorporated in the People's Republic of China)

(Stock Code: 991)

OVERSEAS REGULATORY ANNOUNCEMENT

ANNOUNCEMENT ON THE PROVISION

OF GUARANTEES 

SPECIAL NOTICES The board of directors (the 'Board') and all directors (the 'Directors') of the Company warrant that there are no false representations or misleading statements contained in, or material omissions from, this announcement; and jointly and severally accept full responsibility for the truthfulness, accuracy and completeness of the information contained herein. This announcement is made pursuant to Rule 13.09(2) of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.

Important notices regarding the content:

• The guaranteed parties:   Fujian Datang International Ningde Power Generation Company
                                       Limited ('Ningde Power Company')
                                       Zhejiang Datang Wushashan Power Generation Company Limited
                                       ('Wushashan Power Company')
                                       Shanxi Datang International Yungang Thermal Power Company
                                        Limited ('Yungang Thermal Power Company')
                                        Hebei Datang International Wangtan Power Generation Company
                                        Limited ('Wangtan Power Company')
                                        Datang International (Hong Kong) Limited ('Hong Kong Company')

• The amount of these guarantees and the aggregate guarantee amount: The total amount of these guarantees is approximately RMB2,343.47 million.
• The aggregate guarantee amounts for Ningde Power Company, Wushashan Power Company and Wangtan Power Company before these guarantees were nil.
• The aggregate guarantee amount for Yungang Thermal Power Company before these guarantees was approximately RMB1,344.1 million.
• The aggregate guarantee amount for Hong Kong Company before these guarantees was approximately HK$700 million.
• Provision of counter-guarantee: The other three shareholders of Ningde Power Company will provide a counter-guarantee according to their respective interests in Ningde Power Company; there are no counter-guarantees for other guarantees provided herein.
• The aggregate amount of external guarantees: As of 30 September 2008, the aggregate amount of external guarantees of the Company amounted to approximately RMB13,351.24 million. 
• The aggregate amount of overdue external guarantees: Nil.

I.    Information of the Guarantees

The 'Resolution on provision of guarantees for the financings of the subsidiaries such as Fujian Datang International Ningde Power Generation Company Limited' was considered at the nineteenth meeting of the sixth session of the Board of Datang International Power Generation Co., Ltd. (the 'Company'). The Board agreed to propose the Company to provide guarantee amount for the financing of the following subsidiaries at the general meeting for consideration and approval and authorise the Company to determine the relevant guarantee agreements subject to the guarantee amount approved by the Company's general meeting (the 'General Meeting'): 

1.    It was agreed that the Company shall provide a full-amount joint liability guarantee for the loan of Ningde Power Company, a controlling subsidiary of the Company. The guarantee amount is RMB1,040 million, which will be used for the replacement of bank loans and replenishment of the working capital. The other three shareholders of Ningde Power Company will provide a counter-guarantee to the Company according to their respective interests in Ningde Power Company;

2.    It was agreed that the Company shall provide a joint liability guarantee in an amount of RMB306 million, which is made in proportion to its capital contribution, for the loan of Wushashan Power Company, a controlling subsidiary of the Company. Such guarantee will be used for the replacement of short-term loans which fall due and replenishment of the working capital;

3.    It was agreed that the Company shall provide a joint liability guarantee in an amount of RMB100 million, which is made in proportion to its capital contribution, for the loan of Yungang Thermal Power Company, a wholly-owned subsidiary of the Company. Such guarantee will be used for the replacement of bank loans which fall due and replenishment of the working capital; 

4.    It was agreed that the Company shall provide a joint liability guarantee in an amount of RMB280 million, which is made in proportion to its capital contribution, for the loan of Wangtan Power Company, a controlling subsidiary of the Company. Such guarantee will be used for the replacement of bank loans which fall due and replenishment of the working capital; and

5.    It was agreed that the Company shall provide a counter-guarantee in an amount of HK$700 million (equivalent to approximately RMB617.47 million, for the loan of Hong Kong Company, a wholly-owned subsidiary of the Company, to Bank of China Limited ('BOC') (BOC will provide a guarantee for such loan to Bank of China (Hong Kong) Limited). The counter-guarantee will be provided on a joint-liability basis. Such guarantee will be used for the replacement of bank loans which fall due. 

As the asset-to-liability ratios of Ningde Power Company, Wushashan Power Company, Yungang Thermal Power Company, Wangtan Power Company and Hong Kong Company are over 70%, such resolution will be proposed to the General Meeting for consideration.

II.    Information of the Guaranteed Party 

1.    Ningde Power Company

Ningde Power Company was established in 2003 with a registered capital of RMB370 million. Its address is Jiaocheng District, Ningde City, Fujian Province, the People's Republic of China (the 'PRC'), and its scope of business includes production and sale of power, power technology consultation and services, electric power materials, building materials, mechanical equipment and integrated utilisation of pulverised fuel ash. Currently, this company operates two 600MW coal-fired generating units. The Company holds a 51% interest in Ningde Power Company.

As of 31 December 2007, the total assets, total liabilities and asset-to-liability ratio of Ningde Power Company were approximately RMB6,438.94 million, RMB6,026.05 million and 93.59%, respectively. In 2007, Ningde Power Company recorded an aggregate sales revenue of approximately RMB2,093.04 million and with the net profit of approximately RMB57.12 million in aggregate. 

As of 30 September 2008, the total assets, total liabilities and asset-to-liability ratio of Ningde Power Company were approximately RMB8,884.18 million, RMB8,811.70 million and 99.18%, respectively. From January to September 2008, Ningde Power Company recorded an aggregate sales revenue of approximately RMB1,667.06 million with the net profit of approximately RMB-304.38 million in aggregate (the above figures are unaudited).

2.    Wushashan Power Company

Wushashan Power Company was established in 2007 with a registered capital of RMB1,700 million. Its address is Haishu District, Ningbo City, Zhejiang Province, the PRC, and its scope of business includes coal-fired power generation and supply, power technology consultation and services and integrated utilisation. Currently, this company operates four 600MW coal-fired generating units. The Company holds a 51% interest in Wushashan Power Company.

As of 31 December 2007, the total assets, total liabilities and asset-to-liability ratio of Wushashan Power Company were approximately RMB8,745.05 million, RMB6,905.03 million and 78.96%, respectively. In 2007, Wushashan Power Company recorded an aggregate sales revenue of approximately RMB2,646.51 million with the net profit of approximately RMB140.02 million in aggregate. 

As of 30 September 2008, the total assets, total liabilities and asset-to-liability ratio of Wushashan Power Company were approximately RMB9,651.56 million, RMB8,412.11 million and 87.16%, respectively. From January to September 2008, Wushashan Power Company recorded an aggregate sales revenue of approximately RMB3,325.34 million with the net profit of approximately RMB-477.27 million in aggregate (the above figures are unaudited).

3.    Yungang Thermal Power Company

Yungang Thermal Power Company was established in 2000 with a registered capital of RMB436.29 million. Its address is Datong City, Shanxi Province, the PRC, and its scope of business includes production of heat and power, sale of raw materials for heat and power, power technology consultation and services and integrated utilisation. Currently, this company operates two 220MW coal-fired generating units. The Company holds a 100% interest in Yungang Thermal Power Company. 

As of 31 December 2007, the total assets, total liabilities and asset-to-liability ratio of Yungang Thermal Power Company were approximately RMB1,964.59 million, RMB1,672.57 million and 85.14%, respectively. In 2007, Yungang Thermal Power Company recorded an aggregate sales revenue of approximately RMB670.86 million with the net profit of approximately RMB27.73 million in aggregate. 

As of 30 September 2008, the total assets, total liabilities and asset-to-liability ratio of Yungang Thermal Power Company were approximately RMB3,433.19 million, RMB3,075.07 million and 89.57%, respectively. From January to September 2008, Yungang Thermal Power Company recorded an aggregate sales revenue of approximately RMB473.93 million with the net profit of approximately RMB-101.82 million in aggregate (the above figures are unaudited).

4.    Wangtan Power Company

Wangtan Power Company was established in 2006 with a registered capital of RMB450 million. Its address is Tangshan City, Hebei Province, the PRC, and its scope of business includes production and sale of power, power technology consultation and services and integrated utilisation. Currently, this company operates two 600MW coal-fired generating units. The Company holds a 70% interest in Wangtan Power Company.

As of 31 December 2007, the total assets, total liabilities and asset-to-liability ratio of Wangtan Power Company were approximately RMB4,633.70 million, RMB4,199.03 million and 90.62%, respectively. In 2007, Wangtan Power Company recorded an aggregate sales revenue of approximately RMB2,151.52 million with the net profit of approximately RMB123.46 million in aggregate. 

As of 30 September 2008, the total assets, total liabilities and asset-to-liability ratio of Wangtan Power Company were approximately RMB4,532.57 million, RMB4,252.22 million and 93.81%, respectively. From January to September 2008, Wangtan Power Company recorded an aggregate sales revenue of approximately RMB1,573.62 million with the net profit of approximtely RMB-156.75 million in aggregate (the above figures are unaudited).

5.    Hong Kong Company 

Hong Kong Company was incorporated in Hong Kong in 2004 as a wholly-owned subsidiary of the Company, with a registered capital of US$2.9 million. Hong Kong Company is principally engaged in development of power projects, trading of coal and four major types of pipe for use in power plants. Currently, this company operates four 38MW hydropower generating units of Qinghai Zhiganglaka Hydropower Station.

As of 31 December 2007, the total assets, total liabilities and asset-to-liability ratio of Hong Kong Company were approximately RMB93.28 million, RMB68.09 million and 73.00%, respectively. In 2007, Hong Kong Company recorded an aggregate sales revenue of approximately RMB169.12 million with the net profit of approximately RMB1 million in aggregate. 

As of 30 September 2008, the total assets, total liabilities and asset-to-liability ratio of Hong Kong Company were approximately RMB1,764.49 million, RMB1,679.94 million and 95.21%, respectively. From January to September 2008, Hong Kong Company recorded an aggregate sales revenue of approximately RMB205.65 million with the net profit of approximately RMB-4.87 million in aggregate (the above figures are unaudited).

III.    Major Terms of the Guarantee Contracts

The Board will propose at the General Meeting to authorise the Board to determine the major terms of the following guarantee agreements subject to the guarantee amount approved at the General Meeting, under which:

1.    The Company shall provide a guarantee in an amount of RMB1,040 million for the loan of RMB1,040 million of Ningde Power Company. The guarantee will be provided on a joint-liability basis, and shall cover the principal amount, its interest, penalty interest, compensation, default penalty, indemnities and expenses for execution of creditor's rights. The term of the guarantee period is subject to loan period agreed between Ningde Power Company and the relevant commercial bank.

2.    The Company shall provide a guarantee in an amount of RMB306 million for the loan of RMB600 million of Wushashan Power Company. The guarantee will be provided on a joint-liability basis, and shall cover the principal amount, its interest, penalty interest, compensation, default penalty, indemnities and expenses for execution of creditor's rights. The term of the guarantee period is subject to the loan period agreed between Wushashan Power Company and the relevant commercial bank.

3.    The Company shall provide a guarantee in an amount of RMB100 million for the loan of RMB100 million of Yungang Thermal Power Company. The guarantee will be provided on a joint-liability basis, and shall cover the principal amount, its interest, penalty interest, compensation, default penalty, indemnities and expenses for execution of creditor's rights. The term of the guarantee period is subject to the loan period agreed between Yungang Thermal Power Company and the relevant commercial bank.

4.    The Company shall provide a guarantee in an amount of RMB280 million for the loan of RMB400 million of Wangtan Power Company. The guarantee will be provided on a joint-liability basis, and shall cover the principal amount, its interest, penalty interest, compensation, default penalty, indemnities and expenses for execution of creditor's rights. The term of the guarantee period is subject to the loan period agreed between Wangtan Power Company and the relevant commercial bank.

5.    The Company shall provide a counter-guarantee to BOC for the loan of HK$700 million applied by Hong Kong Company from Bank of China (Hong Kong) Limited ('BOCHK') while BOC will provide a guarantee for such loan to BOCHK. The counter-guarantee will be provided on a joint-liability basis, and shall cover the principal amount, its interest, penalty interest, compensation, default penalty, indemnities and expenses for execution of creditor's rights. The term of the counter-guarantee period is subject to the loan period agreed between Hong Kong Company and BOCHK.

IV.    Opinion of the Board

The Board is of the opinion that the loans borrowed by Ningde Power Company, Wushashan Power Company, Yungang Thermal Power Company and Wangtan Power Company from the commercial banks can replace their respective short-term loans which fall due and resolve the capital shortage for the purchase of fuel coal arising from the rising fuel prices. Besides, the loan of Hong Kong Company to BOCHK can replace its bank loans which fall due. The provision of the guarantees by the Company to the commercial banks for the loans of its subsidiaries is in line with the requirements of the overall development of the Company and its subsidiaries.

The Board has agreed that the Company shall provide a guarantee in an amount of RMB1,040 million for the full amount of loan of Ningde Power Company. The other three shareholders of Ningde Power Company will provide a counter-guarantee to the Company according to their respective interests in Ningde Power Company; that the Company shall provide a guarantee in an amount of RMB306 million, which is made in proportion to its capital contribution, for the loan of Wushashan Power Company; that the Company shall provide a guarantee in an amount of RMB100 million, which is made in proportion to its capital contribution, for the loan of Yungang Thermal Power Company; that the Company shall provide a guarantee in an amount of RMB280 million, which is made in proportion to its capital contribution, for the loan of Wangtan Power Company; and that the Company shall provide a counter-guarantee in an amount of HK$700 million (equilvalent to approximately RMB617.47 million) for the loan of Hong Kong Company to BOC. The Board has agreed to propose the above-mentioned guarantees at the General Meeting for consideration and approval. 

V.    Aggregate Amount of External Guarantees and Amount of Overdue Guarantees

As of 30 September 2008, the Company's aggregate amount of external guarantees was approximately RMB13,351.24 million (unaudited), representing 41.21% of the audited net assets in the latest financial report. Such guarantees were all made for the controlling subsidiaries, jointly-controlled entities and associates of the Company and there were no overdue guarantees.

By Order of the Board  

Zhou Gang  

Secretary to the Board

Beijing, the PRC, 11 November 2008

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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