Discloseable, Connected Trans
Datang Intl Power Generation Co Ld
05 May 2008
THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION
If you are in any doubt as to any aspect of this circular or as to the action to
be taken, you should consult a licensed securities dealer, bank manager,
solicitor, professional accountant or other professional adviser.
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GENERATION CO., LTD., you should at once hand this circular to the purchaser or
transferee or to the bank, licensed securities dealer or other agent through
whom the sale or transfer was effected for transmission to the purchaser or
transferee.
The Stock Exchange of Hong Kong Limited takes no responsibility for the contents
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expressly disclaims any liability whatsoever for any loss howsoever arising from
or in reliance upon the whole or any part of the contents of this circular.
--------------------------------------------------------------------------------
DATANG INTERNATIONAL POWER GENERATION CO. LTD.
(a sino-foreign joint stock limited company incorporated in the People's
Republic of China)
(Stock Code: 991)
DISCLOSEABLE AND CONNECTED TRANSACTION
Independent Financial Advisor to the Independent Board Committee
and the Independent Shareholders
--------------------------------------------------------------------------------
A letter from the Board of the Company is set out on pages 4 to 11 of this
circular. A letter from the Independent Board Committee is set out on pages 12
to 13 of this circular. A letter from DBS Asia Capital Limited containing its
advice to the Independent Board Committee and the Independent Shareholders is
set out on pages 14 to 19 of this circular.
The Company will convene the AGM at 9:00 a.m. on Friday, 30 May 2008 at the
multi-purpose function room of 3/F., CTS (HK) Grand Metro Park Hotel, No. 338
Guanganmennei Avenue, Xuanwu District, Beijing, the PRC, at which, among other
things, the Investment Agreement and the connected and discloseable transaction
contemplated thereunder will be considered. The notice of AGM is set out on
pages 32 to 37 of this circular and has been dispatched to the shareholders on
14 April 2008.
1 May 2008
CONTENTS
Page
Definitions 1
Letter from the Board 4
Letter from the Independent Board Committee 12
Letter from DBS Asia 14
Appendix - General information 20
Notice of the Annual General Meeting 32
DEFINITIONS
In this circular, unless the context otherwise requires, the following
expressions have the following meanings:
' AGM' the annual general meeting of the Company to be held at 9:00 a.m. on Friday, 30 May 2008 at
the multi-purpose function room of 3/F., CTS (HK) Grand Metro Park Hotel, No. 338
Guanganmennei Avenue, Xuanwu District, Beijing, the PRC, at which, among other things, the
Investment Agreement and the connected and discloseable transaction contemplated thereunder
will be considered
' A Share(s)' the domestic ordinary share(s) of the Company with a nominal value of RMB1.00 each
' Articles of the Articles of Association of the Company
Association'
' Beijing Gas Group' (Beijing Gas Group Co., Ltd), a limited company established under the laws of the PRC and a
wholly-owned subsidiary of Beijing Enterprises Holding Company Limited, a company incorporated
in Hong Kong and listed on The Stock Exchange of Hong Kong Limited
' Board' the board of directors of the Company
' CDC' (China Datang Corporation), a state-owned enterprise established under the laws of the PRC and
a controlling Shareholder of the Company holding approximately 33.73% of the issued share
capital of the Company as at the date of this circular
' Company' Datang International Power Generation Co., Ltd., a sino-foreign joint stock limited company
incorporated in the PRC on 13 December 1994, of which the H Shares are listed on The Stock
Exchange of Hong Kong Limited and The London Stock Exchange Limited and the A Shares are
listed on the Shanghai Stock Exchange
' Connected Person' has the meaning ascribed to it under the Listing Rules
' DBS Asia' DBS Asia Capital Limited, the independent financial adviser to the Independent Board Committee
and the Independent Shareholders in respect of the Investment Agreement, a licensed
corporation for types 1 (dealing in securities), 4 (advising on securities) and 6 (advising on
corporate finance) regulated activities under the SFO
' Directors' directors of the Company
' Group' the Company and the subsidiaries and the jointly controlled entity
' H Share(s)' the overseas listed foreign shares of the Company with a nominal value of RMB1.00 each
' HK$' Hong Kong dollar(s), the lawful currency of Hong Kong
' Hong Kong' the Hong Kong Special Administrative Region of the PRC
' Independent Board the independent board committee of the Company, comprising four independent non-executive
Committee' Directors, namely Mr. Xie Songlin, Mr. Liu Chaoan, Mr. Yu Changchun and Mr. Xia Qing
' Independent the shareholders other than the connected persons of the Company; CDC and its associates have
shareholders' to be abstained from voting in approving the Investment Agreement in the general meeting
' Investment Agreement' the investment agreement entered into on 11 April 2008 by the Company, Beijing Gas Group, CDC
and New Horizon Capital to establish the Keqi Coal-based Gas Company, for purpose of planning,
constructing and operating the Keqi Coal-based Gas Project
' Keqi Coal-based Gas Inner Mongolia Datang International Keqi Coal-based Gas Company Limited
Company'
' Keqi Coal-based Gas the Coal-based gas project involving the expected production of 4,000,000,000 cubic meters of
Project' natural gas and other by-products per annum in Kesheketeng Qi, Inner Mongolia (to be placed,
constructing and operated by the Company)
' Latest Practicable 28 April 2008, being the latest practicable date prior to the printing of this circular for
Date' ascertaining certain information contained in this circular
' Listing Rules' Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited
' Ministry of Commerce Ministry of Commerce of the PRC
'
' New Horizon Capital' (New Horizon Capital Advisors Limited), a fund established in Hong Kong
' PRC' the People's Republic of China
' RMB' Renminbi, the lawful currency of the PRC
' Shareholder(s)' shareholder(s) of the Company
' %' per cent.
For the purpose of this circular, HK$1.00 is equivalent to RMB0.9
LETTER FROM THE BOARD
DATANG INTERNATIONAL POWER GENERATION CO. LTD.
(a sino-foreign joint stock limited company incorporated in the People's
Republic of China)
(Stock Code: 991)
Executive Directors: Registered office:
Mr. Zhang Yi No. 482 Guanganmennei Avenue
Mr. Zhou Gang Xuanwu District
Beijing, 100053
Non- Executive Directors: PRC
Mr. Zhai Ruoyu (Chairman)
Mr. Hu Shengmu Principal place of business
Mr. Fang Qinghai in Hong Kong:
Mr. Liu Haixia c/o Huen Wong & Co. in association with
Ms. Guan Tiangang Fried, Frank, Harris, Shriver & Jacobson LLP
Mr. Su Tiegang 1105-1108 Gloucester Tower
Mr. Ye Yonghui The Landmark
Mr. Li Gengsheng 15 Queen's Road Central
Hong Kong
Independent non-executive Directors:
Mr. Xie Songlin
Mr. Liu Chaoan
Mr. Yu Changchun
Mr. Xia Qing
1 May 2008
To the Shareholders
Dear Sir or Madam,
DISCLOSEABLE AND CONNECTED TRANSACTION
INTRODUCTION
The Board announces that on 11 April 2008, the Company entered into the
Investment Agreement with Beijing Gas Group, CDC and New Horizon Capital to
establish the Keqi Coal-based Gas Company, for the purposes of planning,
constructing and operating the Keqi Coal-based Gas Project. The Company, Beijing
Gas Group, CDC and New Horizon Capital agreed to contribute to the establishment
of Keqi Coal-based Gas Company in the proportion of 51%, 33%, 6% and 10%,
respectively.
Pursuant to the Listing Rules, as the consideration ratio and assets ratio (as
defined in Rule 14.07 of the Listing Rules) are more than 5% but less than 25%,
the Investment Agreement constitutes a discloseable transaction of the Company
by virtue of Rule14.04(1)(f) of the Listing Rules which is subject to the
notification and announcement requirements as set out in Rules 14.34 to 14.39 of
the Listing Rules.
As at the Latest Practicable Date, CDC held approximately 33.73% of the issued
share capital of the Company. Accordingly, CDC is a connected person of the
Company under the Listing Rules and the Investment Agreement constitutes a
connected transaction of the Company by virtue of Rule 14A.13(1)(a) of the
Listing Rules. As each of the assets and consideration ratios (as defined in
Rule 14.07 of the Listing Rules) is more than 2.5%, the Investment Agreement is
subject to the reporting, announcement and Independent Shareholders' approval
requirements under Chapter 14A of the Listing Rules. The Company will also
disclose the relevant details in the next published annual report and accounts
of the Company in accordance with the relevant requirements as set out in Rule
14A.45 of the Listing Rules.
The purpose of this circular is to provide you with further details of the
Investment Agreement, to set out the recommendation of the Independent Board
Committee and to set out the letter of advice from DBS Asia to the Independent
Board Committee and the Independent Shareholders in respect of the Investment
Agreement.
INVESTMENT AGREEMENT
Date
11 April 2008
Parties to the Investment Agreement
1. The Company,
2. Beijing Gas Group,
3. CDC, and
4. New Horizon Capital
To the best of the directors' knowledge, information and belief having made
all reasonable enquiry, each of Beijing Gas Group and New Horizon Capital (and
their ultimate beneficial owner) are third parties independent of the Company
and connected persons of the Company.
Major terms of the Investment Agreement
Pursuant to the Investment Agreement, the Company, Beijing Gas Group, CDC and
New Horizon Capital agreed to contribute in cash to the establishment of Keqi
Coal-based Gas Company in the proportion of 51%, 33%, 6% and 10%, respectively,
for the purposes of planning, constructing and operating the Keqi Coal-based Gas
Project.
The Keqi Coal-based Gas Project involves a total investment of approximately
RMB18,780,000,000 (equivalent to approximately HK$20,867,000,000). The total
capital commitment of the Company will be RMB9,577,800,000 (i.e. 51% of the
total investment amount of RMB18,780,000,000).The ultimate registered capital of
Keqi Coal-based Gas Company is approximately 30% of the total investment of the
project, which is approximately RMB5,634,000,000 (equivalent to approximately
HK$6,260,000,000).
Pursuant to the Investment Agreement, the initial registered capital of Keqi
Coal-based Gas Company is RMB100,000,000 (equivalent to approximately
HK$111,111,111). The Company, Beijing Gas Group, CDC and New Horizon Capital
will be responsible for contributing by way of cash in the proportion of 51%,
33%, 6% and 10%, respectively (i.e., the approximate sums of RMB51,000,000
(equivalent to approximately HK$56,666,667), RMB33,000,000 (equivalent to
approximately HK$36,666,667), RMB6,000,000 (equivalent to approximately
HK$6,666,667) and RMB10,000,000 (equivalent to approximately HK$11,111,111),
respectively), to the initial registered capital of Keqi Coal-based Gas Company.
As at the date of this circular, the respective parties to the Investment
Agreement have not contributed any registered capital to Keqi Coal-based Gas
Company. The Company's contribution to the registered capital of Keqi
Coal-based Gas Company will be funded by internal resources.
The respective parties to the Investment Agreement agree that they will increase
the registered capital of Keqi Coal-based Gas Company in stages based on the
construction progress of the Keqi Coal-based Gas Project, and the Company,
Beijing Gas Group, CDC and New Horizon Capital will contribute to the increased
registered capital in the same proportion as their respective contributions to
the aforesaid initial registered capital of Keqi Coal-based Gas Company.
Pursuant to the Investment Agreement, all funds required for the construction of
the Keqi Coal-based Gas Project will be funded by the registered capital of Keqi
Coal-based Gas Company and financing resources in the PRC, i.e., loans from
banks. The respective parties to the Investment Agreement agree to, if
necessary, provide guarantees to Keqi Coal-based Gas Company's financing in
proportion to their respective capital contributions, while Keqi Coal-based Gas
Company will provide a counter-guarantee with its assets and earnings or with
other feasible means as a security against the guarantees provided by the
respective parties to the Investment Agreement. In the event of any further
capital injections or other guarantees against borrowings required upon the
Company, the Company will comply with the relevant requirements under the
Listing Rules if and when necessary.
Effective date of the Investment Agreement
The Investment Agreement will become effective once the respective parties to
the Investment Agreement have respectively obtained their internal approvals and
the approvals from the relevant government authorities of the PRC for the
investment items in the Investment Agreement. As at the date of this circular,
the Investment Agreement has been approved by the internal competent authorities
of Beijing Gas Group, CDC, New Horizon Capital.
However, the Investment Agreement is yet to be approved by the Independent
Shareholders pursuant to the Articles of Association and the Listing Rules.
Since New Horizon Capital is a fund company set up in Hong Kong, the Investment
Agreement is subject to the approval by the Ministry of Commerce. As at the date
of this circular, the approval of the Investment Agreement by the Ministry of
Commerce is still pending.
Other major terms of the Investment Agreement
The term of operation of Keqi Coal-based Gas Company shall be 30 years from the
date of issuance of the relevant business license.
REASONS FOR AND BENEFITS OF THE ENTERING INTO INVESTMENT AGREEMENT
The Company has devised the objective of diversification of business structure,
and the Company's investment in and construction of Keqi Coal-based Gas
Project will allow the Company to develop on the aspect of clean energy
production. The Keqi Coal-based Gas Project is located in an area with abundant
coal resources which provides a reliable source of raw materials and fuels to
the Keqi Coal-based Gas Project, and with abundant water resources and
convenient transportation facilities which will help to lower the operation
costs of the Keqi Coal-based Gas Project. Moreover, the Keqi Coal-based Gas
Project aims to supply gas largely to Beijing and to cities along the gas
transmission pipeline upon its completion. As a political, cultural and
financial center of the PRC, Beijing has an enormous demand for clean energy
natural gas, given its higher requirement for the quality of the air
environment. The Company believes the Keqi Coal-based Gas Project, upon its
completion, will benefit from the growing demand for clean energy in Beijing and
the cities along the gas transmission pipeline, which in turn will enhance the
Company's profitability as a whole. The Directors believe that entering into
the Investment Agreement will facilitate the profit growth of the Company.
The terms of the Investment Agreement were negotiated on an arm's length
basis between the Company and the parties thereto and were determined on normal
commercial terms. The Directors (excluding the independent non-executive
directors whose views will be contained in the Circular taking into account the
advice from the independent financial adviser) consider that the terms of
Investment Agreement are fair and reasonable and in the best interest of the
Company and the Shareholders as a whole.
Information relating to Keqi Coal-based Gas Company
Pursuant to the Investment Agreement, Keqi Coal-based Gas Company, upon its
establishment, will plan, construct and operate the Keqi Coal-based Gas Project,
which is located in Kesheketeng Qi, Chifeng City, Inner Mongolia. Keqi
Coal-based Gas Project, will use the brown coal from the Shengli Coalfield which
is 5 km from the northwest of Xilinhaote, Inner Mongolia, as raw materials and
fuels, and apply developed and reliable gasification technology. Natural gas,
the principal product, will be transmitted by a long-distance pipeline covering
440 km in total which runs from the project site (Kesheketeng Qi destination) to
the final destination in Miyun, Beijing, the PRC. The final size of the Keqi
Coal-based Gas Project is subject to the approval by the relevant government
authorities of the PRC. The Keqi Coal-based Gas Project will be constructed in
three stages. The whole project is expected to be completed by 2012 and is
expected to produce 4,000,000,000 cubic meters of natural gas and other
by-products per annum upon commencement of production.
Keqi Coal-based Gas Company will become a subsidiary of the Company upon its
establishment and the results of Keqi Coal-based Gas Company will be
consolidated in to the accounts of the Company subsequent to its establishment.
Even though the current domestic market demand for the clean energy source of
natural gas is substantially larger than its supply, and that the market prices
of natural gas rise along with the increase of prices of other energy sources
such as petroleum and coal, the future benefits to be derived by Keqi Coal-based
Gas Company will be considerably affected in the event that the market prices of
natural gas fluctuate in the future. The Company will closely monitor the trend
of domestic and international natural gas prices, as well as striving to achieve
a stronger risk-resistant ability for Keqi Coal-based Gas Company.
Information relating to the Group
The Group 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 in the PRC.
Information relating to Beijing Gas Group
Beijing Gas Group is a wholly-owned subsidiary of Beijing Enterprises Holding
Company Limited, a company incorporated in Hong Kong and listed on The Stock
Exchange of Hong Kong Limited. Beijing Enterprises Group Company Limited, a
state-owned enterprise in the PRC, is the beneficial controller of Beijing
Enterprises Holding Company Limited. Beijing Gas Group has a registered capital
of RMB1,980,000,000 and is principally engaged in the city-gas pipeline
business.
Information relating to CDC
CDC is a state-owned enterprise and its registered capital is RMB12,000,000,000.
Its main scope of operations are the development, investment, construction,
operation and management of power energy, organisation of power (thermal)
production and sales, power technology development and consultation.
Information relating to New Horizon Capital
New Horizon Capital is a fund company set up in May 2007 in Hong Kong. The
investors of the fund comprise more than 20 internationally-renowned
institutions. The fund size is US$500,000,000. New Horizon Capital is a
secondary fund under management by the team, investing largely in various
industries such as manufacturing, new energy, consumables, biomedicines and
automobile accessories and parts.
DISCLOSEABLE AND CONNECTED TRANSACTIONS
Pursuant to the Listing Rules, as the consideration ratio and assets ratio (as
defined in Rule 14.07 of the Listing Rules) is more than 5% but less than 25%,
the Investment Agreement constitutes a discloseable transaction of the Company
by virtue of Rule14.04(1)(f) of the Listing Rules which is subject to the
notification and announcement requirements as set out in Rules 14.34 to 14.39 of
the Listing Rules.
As at the Latest Practicable Date, CDC held approximately 33.73% of the issued
share capital of the Company. Accordingly, CDC is a connected person of the
Company under the Listing Rules and the Investment Agreement constitutes a
connected transaction of the Company by virtue of Rule 14A.13(1)(a) of the
Listing Rules. As each of the assets and consideration ratios (as defined in
Rule 14.07 of the Listing Rules) is more than 2.5%, the Investment Agreement is
subject to the reporting, announcement and Independent Shareholders' approval
requirements under Chapter 14A of the Listing Rules. The Company will also
disclose the relevant details in the next published annual report and accounts
of the Company in accordance with the relevant requirements as set out in Rule
14A.45 of the Listing Rules.
AGM
The Company will convene the AGM to, among other things, consider and approve
the Investment Agreement and the transaction contemplated thereunder. A notice
convening the AGM has been despatched to Shareholders on 14 April 2008.
Shareholders and their associates who has a material interest in the transaction
shall abstain from voting in the AGM. CDC and its associates have to be
abstained from voting in approving the Investment Agreement in the AGM in
accordance with the Listing Rules and that the voting will be taken by way of a
poll.
POLL PROCEDURE
Pursuant to the Articles of Association, a general voting shall be made at the
Shareholders' meeting by a show of hands. However, the following persons
shall have the right to request for a voting by poll before or after a voting by
show of hands:
(A) the chairman of the meeting; or
(B) at least two Shareholders present in person or by proxy entitled to vote at the meeting; or
(C) one or more Shareholders present in person or by proxy representing 10% or more of the total voting rights of
all the Shareholders.
A person who has made a request for voting by poll can withdraw such demand.
Pursuant to Rule 14A.52 of the Listing Rules, the vote taken at the AGM must be
taken by poll.
RECOMMENDATION
Your attention is drawn to the letter from the Independent Board Committee as
set out on pages 12 to 13 of this circular which contains its recommendation to
the Independent Shareholders on the terms of the Investment Agreement. Your
attention is also drawn to the letter of advice received from DBS Asia, the
independent financial adviser to the Independent Board Committee and the
Independent Shareholders as set out on pages 14 to 19 of this circular which
contains, among others, its advice to the Independent Board Committee and the
Independent Shareholders in relation to the terms of the Investment Agreement,
the casting of votes for or against the resolution approving the Investment
Agreement by poll at the AGM as well as the principal factors and reasons
considered by it in concluding its advice.
The Directors consider that the transaction under the Investment Agreement is
fair and reasonable and in the interest of the Shareholders and the Company as a
whole and they recommend the Shareholders to vote in favour of the resolution in
the AGM.
ADDITIONAL INFORMATION
The assets, earnings and liabilities of the Group will increase as a result of
the establishment of Keqi Coal-based Gas Company upon completion of the
Investment Agreement.
Your attention is also drawn to the general information as set out in the
appendix of this circular.
By Order of the Board
Datang International Power
Generation Co., Ltd.
Zhou Gang
Secretary to the Board
LETTER FROM THE INDEPENDENT BOARD COMMITTEE
DATANG INTERNATIONAL POWER GENERATION CO. LTD.
(a sino-foreign joint stock limited company incorporated in the People's
Republic of China)
(Stock Code: 991)
Legal address and head office
No. 482 Guanganmennei Avenue
Xuanwu District Beijing, 100053
The People's Republic of China
1 May 2008
To the Independent Shareholders
Dear Sir or Madam,
DISCLOSEABLE AND CONNECTED TRANSACTION
We refer to the circular issued by the Company to the Shareholders dated 1 May
2008 (the ' Circular' ) of which this letter forms part. Terms defined in this
Circular shall have the same meanings in this letter unless the context
otherwise requires.
Under the Listing Rules, the transaction contemplated under the Investment
Agreement and the entering into the Investment Agreement constitutes a
discloseable and connected transaction for the Company and is subject to the
approval of the Independent Shareholders at the AGM.
We have been appointed as the Independent Board Committee to consider the terms
of the Investment Agreement and to advise the Independent Shareholders in
connection with the Investment Agreement as to whether, in our opinion, their
terms are fair and reasonable so far as the Independent Shareholders are
concerned and whether the Investment Agreement is in the interests of the
Company and the Shareholders as a whole. DBS Asia has been appointed as the
independent financial adviser to advise us in this respect.
We wish to draw your attention to the letter from the Board and the letter from
DBS Asia as set out in this Circular. Having considered the principal factors
and reasons considered by, and the advice of, DBS Asia as set out in its letter
of advice, we consider that the Investment Agreement is on normal commercial
terms, and that the Investment Agreement is in the best interests of the Company
and the Shareholders as a whole.
We also consider that the terms of the Investment Agreement are fair and
reasonable so far as the Independent Shareholders are concerned. Accordingly, we
recommend the Independent Shareholders to vote in favour of the ordinary
resolution to approve the Investment Agreement in the AGM.
Yours faithfully,
For and on behalf of the Independent Board Committee
Xie Songlin, Liu Chaoan, Yu Changchun, Xia Qing
Independent Board Committee
Datang International Power Generation Co., Ltd.
LETTER FROM DBS ASIA
The following is the text of the letter of advice from DBS Asia, the independent
financial adviser to the Independent Board Committee and Independent
Shareholders, in respect of the discloseable and connected transaction in
relation to the Investment Agreement, which has been prepared for the purpose of
inclusion in this circular
1 May 2008
To the Independent Board Committee
and Independent Shareholders of
Datang International Power Generation Co., Ltd.
Dear Sirs,
DISCLOSEABLE AND CONNECTED TRANSACTION
INTRODUCTION
We refer to our engagement as the independent financial adviser to the
Independent Board Committee and the Independent Shareholders in relation to the
Investment Agreement, details of which are set out in the letter from the Board
as set out in the circular to the Shareholders dated 1 May 2008 (the
'Circular'), of which this letter forms part. Expressions used in this letter
shall have the same meaning as defined in the Circular.
As at the Latest Practicable Date, CDC held approximately 33.73% of the issued
share capital of the Company. Accordingly, CDC is a connected person of the
Company under the Listing Rules, and therefore, the entering into the Investment
Agreement constitutes a connected transaction of the Company pursuant to Rule
14A.13(1)(a) of the Listing Rules. As each of the assets and consideration
ratios (as defined in Rule 14.07 of the Listing Rules) is more than 2.5%, the
Investment Agreement is subject to the reporting, announcement and Independent
Shareholders' approval requirements under Chapter 14A of the Listing Rules.
Our scope of work under this engagement is to assess the fairness and
reasonableness of the terms of the Investment Agreement insofar as the
Independent Shareholders are concerned and whether from this perspective the
Investment Agreement is in the interest of the Company and its Shareholders as a
whole. It is not within our scope of work to opine on any other aspects of the
Investment Agreement. In addition, it is not within our terms of reference to
comment on the commercial merits of the Investment Agreement which is the
responsibility of the Directors.
BASIS OF OUR OPINION
In arriving at our opinion, we have relied on the information, opinions and
facts supplied, and representations made to us by the Directors, advisers and
representatives of the Company (including those contained or referred to in the
Circular). We have also assumed that the information and representations
contained or referred to in the Circular were true and accurate in all material
respects at the time they were made and continue to be so at the date of the
despatch of the Circular. We have no reason to doubt the truth, accuracy and
completeness of the information and representations provided to us by the
Directors. We have also relied on certain information available to the public
and have assumed such information to be accurate and reliable, and we have not
independently verified the accuracy of such information. We have been advised by
the Directors and believe that no material facts have been omitted from the
Circular.
We consider that we have reviewed sufficient information to reach an informed
view to justify reliance on the accuracy of the information contained in the
Circular and to provide a reasonable basis for our opinion. We have not,
however, conducted an independent verification of the information nor have we
conducted any form of in-depth investigation into the businesses and affairs or
the prospects of the Company or any of its respective subsidiaries or
associates.
PRINCIPAL FACTORS CONSIDERED
In arriving at our opinion with regard to the terms of the Investment Agreement,
we have considered the principal factors set out below:
1. BACKGROUND OF THE PARTIES TO THE INVESTMENT AGREEMENT
The parties to the Investment Agreement are the Company, Beijing Gas Group, CDC
and New Horizon Capital
Information relating to the Group
The Group 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
service areas in the PRC.
Information relating to Beijing Gas Group
Beijing Gas Group is a wholly-owned subsidiary of Beijing Enterprises Holding
Company Limited, a company incorporated in Hong Kong and listed on The Stock
Exchange of Hong Kong Limited. Beijing Gas Group is principally engaged in the
city-gas pipeline business.
Information relating to CDC
CDC, a state-owned enterprise, is a substantial shareholder of the Company, and
its main scope of operations are the development, investment, construction,
operation and management of power energy, organisation of power (thermal)
production and sales, power technology development and consultation.
Information relating to New Horizon Capital
New Horizon Capital is a fund company set up in May 2007 in Hong Kong. The
investors of the fund comprise more than 20 internationally-renowned
institutions. The fund size is US$500,000,000. New Horizon Capital is a
secondary fund under management by the team, investing largely in various
industries such as manufacturing, new energy, consumables, biomedicines and
automobile accessories and parts.
2. MAJOR TERMS OF THE INVESTMENT AGREEMENT
Pursuant to the Investment Agreement, the Company, Beijing Gas Group, CDC and
New Horizon Capital agreed to contribute in cash to the establishment of Keqi
Coal-based Gas Company in the proportion of 51%, 33%, 6% and 10%, respectively,
for the purposes of planning, constructing and operating the Keqi Coal-based Gas
Project.
The Keqi Coal-based Gas Project involves a total investment of approximately
RMB18,780,000,000 (equivalent to approximately HK$20,867,000,000). The total
capital commitment of the Company will be RMB9,577,800,000 (i.e. 51% of the
total investment amount of RMB18,780,000,000). The ultimate registered capital
of Keqi Coal-based Gas Company is approximately 30% of the total investment of
the project, which is approximately RMB5,634,000,000 (equivalent to
approximately HK$6,260,000,000).
Pursuant to the Investment Agreement, the initial registered capital of Keqi
Coal-based Gas Company is RMB100,000,000 (equivalent to approximately
HK$111,111,111). The Company, Beijing Gas Group, CDC and New Horizon Capital
will be responsible for contributing by way of cash in the proportion of 51%,
33%, 6% and 10%, respectively i.e., the approximate sums of RMB51,000,000
(equivalent to approximately HK$56,666,667), RMB33,000,000 (equivalent to
approximately HK$36,666,667), RMB6,000,000 (equivalent to approximately
HK$6,666,667) and RMB10,000,000 (equivalent to approximately HK$11,111,111),
respectively to the initial registered capital of Keqi Coal-based Gas Company.
The Company's contribution to the registered capital of Keqi Coal-based Gas
Company will be funded by internal resources.
The respective parties to the Investment Agreement agree that they will increase
the registered capital of Keqi Coal-based Gas Company in stages based on the
construction progress of the Keqi Coal-based Project, and the Company, Beijing
Gas Group, CDC and New Horizon Capital will contribute to the increased
registered capital in the same proportion as their respective contributions to
the aforesaid initial registered capital of Keqi Coal-based Gas Company.
Pursuant to the Investment Agreement, all funds required for the construction of
the Keqi Coal-based Gas Project will be funded by the registered capital of Keqi
Coal-based Gas Company and financing resources in the PRC, i.e., loans from
banks. The respective parties to the Investment Agreement agree to, if
necessary, provide guarantees to Keqi Coal-based Gas Company's financing in
proportion to their respective capital contributions, while Keqi Coal-based Gas
Company will provide a counter-guarantee with its assets and earnings or with
other feasible means as a security against the guarantees provided by the
respective parties to the Investment Agreement.
Keqi Coal-based Gas Company will become a subsidiary of the Company upon its
establishment and the results of Keqi Coal-based Gas Company will be
consolidated into the accounts of the Company subsequent to its establishment.
The term of operation of Keqi Coal-based Gas Company shall be 30 years from the
date of issuance of the relevant business license. The Directors consider that
the terms of the Investment Agreement were negotiated on an arm's length
basis between the Company and the parties thereto and were determined on normal
commercial terms. The Directors consider that the terms of the Investment
Agreement are fair and reasonable to the Company given that the Company, Beijing
Gas Group, CDC and New Horizon Capital each proportionally share their
respective cash contribution to the registered capital and they will severally
guarantee the third party borrowings in proportion to their respective capital
contribution in Keqi Coal-based Gas Company if so required. As the terms of the
Investment Agreement stipulates that the parties to the Investment Agreement
contribute proportionally to their respective share of registered capital and,
where necessary, provide guarantees for loan financing based on their respective
proportional interest in the project, we are of the view that the terms of the
Investment Agreement are fair and reasonable as far as the interests of the
Independent Shareholders are concerned.
3. REASONS FOR AND BENEFITS OF ENTERING INTO THE INVESTMENT AGREEMENT
Entering into the Investment Agreement is within the normal and ordinary course
of business of the Company
Pursuant to the Investment Agreement, Keqi Coal-based Gas Company, upon its
establishment, will plan, construct and operate the Keqi Coal-based Gas Project
which is expected to produce 4,000,000,000 cubic meters of natural gas and other
by-products per annum upon commencement of production. We understand that it is
the Group's business strategy to diversify its electricity power generation
business to other businesses in the energy sector. Accordingly, the entering
into the Investment Agreement is in line with the Group's business strategy
and is within normal and ordinary course of business of the Company.
Convenient location to lower the operation costs
The Keqi Coal-based Gas Project is located in Kesheketeng Qi, Chifeng City,
Inner Mongolia, the PRC, where it has abundant coal resources which provides a
reliable source of raw materials and fuels to the Keqi Coal-based Gas Project,
and abundant water resources and convenient transportation facilities which will
help to lower the operation costs of the Keqi Coal-based Gas Project.
Enormous demand for clean energy
The Keqi Coal-based Gas Project aims to supply gas largely to Beijing and to
cities along the gas transmission pipeline upon its completion. As a political,
cultural and financial center of the PRC, Beijing has an enormous demand for
clean energy natural gas given Beijing's high requirement for quality air
environment. According to the Beijing Statistical Yearbook 2006 and 2007, the
growth rate of domestic consumption of natural gas in Beijing was approximately
13.7% and 44.1% for 2005 and 2006 respectively.
The Company believes that the Keqi Coal-based Gas Project, upon its completion,
will benefit from the growing demand for clean energy in Beijing and the cities
along the gas transmission pipeline, which in turn will enhance the Company's
profitability as a whole. We have discussed with the Company regarding (i) the
strategies in diversifying its businesses within the energy sector, and (ii) the
extent and approach of the feasibility study on the Keqi Coal-based Gas Project,
we understand that the feasibility study is comprehensive in nature and has
included review on technical and financial aspects among others. Similar to
other power projects, the Kaqi Coal-based Gas Project is of such scale and
nature which normally has inherent risks of different nature. We are satisfied
that the Company has devoted reasonable efforts in assessing the feasibility of
Keqi Coal-based Gas Project. The Company expects an enhancement in the overall
earnings of the Group upon completion of the Keqi Coal-based Gas Project.
Diversification of risks
The Company's investment in and construction of Keqi Coal-based Gas Project
allows the Company to diversify its business structure into clean energy
production. In addition, as advised by the Directors, the Keqi Coal-based Gas
Project is set up as a joint venture project with participation of other
parties. This would enable the Company to spread its risks associated with the
project and to allow the Company to diversify its resources into other viable
projects.
4. WORKING CAPITAL
The Keqi Coal-based Gas Project involves a total investment of approximately
RMB18,780,000,000 (equivalent to approximately HK$20,867,000,000). The total
capital commitment of the Company will be RMB9,577,800,000 (i.e. 51% of the
total investment amount of RMB18,780,000,000). The ultimate registered capital
of Keqi Coal-based Gas Company is approximately 30% of the total investment of
the project, which is approximately RMB5,634,000,000 (equivalent to
approximately HK$6,260,000,000). The Company's capital contribution to the
registered capital of Keqi Coal-based Gas Company will be funded by its internal
resources.
We were advised by the Company that if further capital injection or guarantees
against borrowings are required by the Company, the Company will comply with the
relevant requirements under the Listing Rules if and when necessary.
We have discussed with the Directors the impact of the capital contribution
pursuant to the Investment Agreement on the working capital position of the
Company and have reviewed the financial statements of the Company for the year
ended 31 December 2007. The Directors confirmed that the Company has sufficient
working capital to finance its obligations pursuant to the Investment Agreement.
OPINION
Having considered the principal factors discussed above, we are of the opinion
that the entering into the Investment Agreement is in the ordinary and usual
course of business of the Group and the terms of the Investment Agreement are on
normal commercial terms and are fair and reasonable so far as the interests of
Independent Shareholders are concerned and from this perspective the Investment
Agreement is in the interests of the Company and the Shareholders as a whole.
Accordingly, we recommend the Independent Shareholders to vote in favour of the
ordinary resolution to be proposed at the AGM to approve the Investment
Agreement.
Yours faithfully,
For and on behalf of
DBS ASIA CAPITAL LIMITED
Kelvin S. K. Lau
Managing Director
APPENDIX - GENERAL INFORMATION
1. RESPONSIBILITY STATEMENT
This circular includes particulars given in compliance with the Listing Rules
for the purpose of giving information with regard to the Company. The Directors
collectively and individually accept full responsibility for the accuracy of the
information contained in this circular and confirm, having made all reasonable
enquiries that to the best of their knowledge and belief, there are no other
facts the omission of which would make any statement in this circular
misleading.
2. DISCLOSURE OF INTERESTS
Directors, supervisors and chief executive of the Company
(i) As at Latest Practicable Date, save and except Mr. Fang Qinghai, being a Director, who held 24,000 A shares of
the Company, none of the Directors, supervisors and chief executive of the Company have any interests and short
positions in the shares, underlying shares and/or debentures (as the case may be) of the Company or any of its
associated corporations (within the meaning of the SFO) which was required to be notified to the Company and
the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interest and short position
which any such Director, chief executive or supervisor is taken or deemed to have under such provisions of the
SFO) or which was required to be entered into the register required to be kept by the Company under section 352
of the SFO or which was otherwise required to be notified to the Company and the Stock Exchange pursuant to the
Model Code for Securities Transactions by Directors of Listed Issuers in the Listing Rules.
(ii) As at the Latest Practicable Date, none of the Directors, proposed Directors, supervisors or proposed
supervisors of the Company has any direct or indirect interest in any assets which have since 31 December 2005
(being the date to which the latest published audited financial statements of the Company were made up) been
acquired or disposed of by or leased to any member of the Group, or are proposed to be acquired or disposed of
by or leased to any member of the Group.
Substantial shareholders of the Company
As at Latest Practicable Date, so far as the Directors are aware, each of the
following persons, not being a Director, chief executive or supervisor of the
Company, had an interest in the Shares which falls to be disclosed to the
Company and the Stock Exchange under the provisions of Division 2 and 3 of Part
XV of the SFO:
Name Class of Number of Percentage Percentage Percentage
Shares issued to total to total to total
ordinary issued share issued issued
shares held capital of the domestic H shares
Company shares
China Datang A shares 3,959,241,160 (L) 33.73% 46.78% -
Corporation
(Note 1)
Beijing Energy A shares 1,343,584,800 (L) 11.45% 15.87% -
Investment
(Holding)
Company
(Notes 2& 3)
Hebei Construction A shares 1,343,584,800 (L) 11.45% 15.87% -
Investment
Company
(Note 4)
Tianjin Jinneng A shares 1,212,012,600 (L) 10.33% 14.17% -
Investment
Company
(Note 5)
J.P. Morgan H Shares 385,052,344 (L) 3.28% (L) - 11.76% (L)
Chase & Co. 43,756,362 (S) 0.37% (S) 1.34% (S)
255,897,360 (P) 2.18% (P) 7.82% (P)
Morgan Stanley H Shares 261,665,610 (L) 2.23% (L) - 7.99% (L)
102,349,670 (S) 0.87% (S) 3.13% (S)
UBS AG H Shares 258,288,238 (L) 2.20% (L) - 7.89% (L)
49,222,500 (S) 0.42% (S) 1.50% (S)
Citigroup Inc. H Shares 220,662,911 (L) 1.88% (L) - 6.74% (L)
91,047,797 (S) 0.78% (S) 2.78% (S)
45,492,686 (P) 0.39% (P) 1.39% (P)
T. Rowe Price H Shares 170,958,000 (L) 1.46% (L) - 5.22% (L)
Associates, Inc.
and its affiliates
(L) means long position (S) means short position (P) means lending pool
Notes:
1. Each of Mr. Zhai Rouyu, Mr. Hu Shengmu and Mr. Fang Qinghai, all non-executive Director, is an employee of
China Datang Corporation.
2. Mr. Liu Haixia, the non-executive Director, is an employee of Beijing Energy Investment (Holding) Company.
3. Ms. Guan Tiangang is an employee of Beijing Jingneng International Energy Company Limited, a wholly-owned
subsidiary of Beijing Energy Investment (Holding) Limited.
4. Each of Mr. Su Tiegang and Mr. Ye Yonghui, both non-executive Directors, is an employee of Hebei Construction
Investment Company.
5. Mr. Li Gengsheng, a non-executive Director, is an employee of Tianjin Jinneng Investment Company.
Save as disclosed above and so far as the Directors are aware, as at the Latest
Practicable Date, no other person had an interest or short position in the
Company's shares or underlying shares (as the case may be) which would fall
to be disclosed to the Company and the Stock Exchange under the provisions of
Divisions 2 and 3 of Part XV of the SFO.
Substantial Shareholders in other members of the Group
Other members of the Group Shareholders holding Percentage shareholding
of shareholders in
10% or more in other members of the
Group
other members of the Group
Inner Mongolia Datang International Tuoketuo Beijing Power Investment (Group) 25%
Power Generation Company Limited Company Limited
Inner Mongolia Mengdian Huaneng Thermal Power 15%
Company Limited
Tianjin Datang International Panshan Power Tianjin Jinneng Investment Company 25%
Generation
Company Limited
Shanxi Datang International Shentou Tianjin Jinneng Investment Company 40%
Power Generation Company Limited
Shanxi Datang International Yungang Thermal Shanxi Hezhong Investment and Guarantee Company 20%
Power Limited
Company Limited
Yunnan Datang International Honghe Power Yunnan Development and Investment Company 15%
Generation Limited
Company Limited
Yunnan Xiaolongtan Mining Bureau 10%
Gansu Datang International Liancheng State Power DevelopmentCompany Limited 25%
Power Generation Company Limited
Gansu Power Construction and Investment Company 20%
Limited
Hebei Datang InternationalTangshan Thermal Tangshan Construction Investment Company 20%
Power
Company Limited
Yunnan Datang International Nalan Honghezhou Development and Investment Company 20%
Hydropower Development Company Limited Limited
Jinping Power Company Limited 15%
Beijing Huake Power Engineering and Technology 14%
Company Limited
Yunnan Datang International Lixianjiang Beijing State Power Anrong Power Investment 25%
Hydropower Company Limited
Development Company Limited
Shanxi Datang International Yuncheng Power Beijing Huafu Power Investment Company Limited 20%
Generation Company Limited
Jiangsu Datang International Lusigang Power Nantong Zhonghe Holding Company Limited 10%
Generation Company Limited
Guangdong Datang International Chaozhou Beijing China Power Huaze Investment Company 12%
Power Generation Company Limited Limited
Fujian Datang International Ningde Fujian Hesheng Group Company Limited 25%
Power Generation Company Limited
Mindong Power Investment Company Limited 10%
Beijing Huafu Power Investment Company Limited 10%
Chongqing Datang International Wulong Chongqing Hangyun Construction Development 24.5%
Hydropower Development Company Limited Company Limited
Chongqing Dingtai Power (Group) Company Limited 24.5%
Yunnan Datang International Wenshan Hydropower Yunnan Wenshan Power Company Limited 25%
Development Company Limited
State Power Kunming Survey and Design Research 15%
Institute
Hebei Datang International Wangtan Power Hebei Construction Investment Company 30%
Generation
Company Limited
Chongqing Datang International Shizhu Chongqing City Construction Investment Company 30%
Power Generation Company Limited
Inner Mongolia Datang International Duolun Duolun Province Hyropower Generation Company 41%
Limited
Hydropower Multiple Development Company
Limited
Sichuan Datang International Ganzi Hydropower Ganzi Province Gan Tou Hydropower Generation 20%
Generation Development Company Limited Development Company Limited
Chongqing Datang International Pengshui Chongqing Energy Resources Investment Group 12%
Company
Hydropower Development Company Limited
Chongqing Dingtai Power (Group) Company Limited 12%
Chongqing Tuoyuan Industry Co., Ltd. 12%
Guizhou Province Development Investment Company 12%
Guizhou Wujiang Hydropower Development Co., 12%
Ltd.
Zhejiang Datang Wushashan Power Generation Zhejiang Energy Group Co., Ltd. 35%
Company Limited
Ningbo City Power Development Company 10%
Yunnan Datang International Deqin Hydropower Yunnan Danzhulong Hydropower Co., Ltd. 30%
Development Company Limited
Kangding Guoneng Investment Co., Ltd. 30%
Inner Mongolia Datang International Hohhot Beijing China Power Huaze Investment Co., Ltd. 49%
Thermal Power Generation Company Limited
Inner Mongolia Datang International Renewable Tongfang Investment Co., Ltd. 25%
Energy Resource Development Company Limited
Qinghua Tongfang Environment Co., Ltd. 25%
Xinyuan Holdings Group co., Ltd. (Note) 24%
Yunnan Datang International Hengjiang Yunnan Huiqin Power Generation Co., Ltd. 30%
Hydropower
Development Company Limited
Ordos Linyang Resources Consultation Zhongneng Power Fuel Co, Ltd. 16%
Company Limited
Note: The Company entered into agreements with two shareholders of Inner Mongolia Datang International Renewable
Energy Resource Development Company Limited, who hold 24% and 25% of the equity interest in this company
respectively. Pursuant to which the two shareholders will act in concert with the Company in the financial and
operation decision making of this company. Therefore the Company obtained effective control over this company
and accounted for this company as a subsidiary since 26 July 2007.
Save as disclosed above, as at the Latest Practicable Date, there was no other
person (other than a Director, supervisor or chief executive of the Company or a
member of the Group), who had an interest or short position in the Shares or
underlying Shares which would fall to be disclosed to the Company under the
provisions of Divisions 2 and 3 of Part XV of the SFO, or who was, directly or
indirectly, interested in 10% or more of the nominal value of any class of share
capital carrying rights to vote in all circumstances at general meetings of any
other member of the Group.
3. SERVICE AGREEMENTS
As at the Latest Practicable Date, none of the Directors, proposed directors,
supervisors or proposed supervisors of the Company had any existing or proposed
service contract with any member of the Group (excluding contracts expiring or
determinable by the Company within one year without payment of compensation
(other than statutory compensation).
4. INTEREST IN CONTRACT
As at the Latest Practicable Date, none of the Directors or supervisors of the
Company was materially interested in any contract or arrangement entered into by
any member of the Group, and which was significant in relation to the business
of the Group.
5. MATERIAL CHANGES
The Directors are not aware of any material adverse change in the financial or
trading position of the Group since 31 December 2007, being the date to which
the latest published audited financial statements of the Group were made up.
6. COMPETING INTEREST
As at the Latest Practicable Date, none of the directors of the Company and its
subsidiaries, or their respective Associates has interests in the businesses
which compete or are likely to compete, either directly or indirectly, with the
businesses of the Company and its subsidiaries.
7. EXPERT
(a) The following sets out the qualifications of the expert which has given its opinion or advice as contained in
this circular:
Name Qualifications
DBS Asia Capital Limited A licensed corporation to engage in types 1 (dealing in securities), 4 (advising on
securities) and 6 (advising on corporate finance) regulated activities under the SFO
(b) As at the Latest Practicable Date, the holding company of DBS Asia and its subsidiaries (collectively the
'DBS Group') held, directly or indirectly, in aggregate 2,000,400 shares of the Company, representing
approximately 0.06% of the issued share capital of the Company. Save as disclosed above, DBS Asia did not have
any shareholding, direct or indirect, in any member of the Group or any right (whether legally enforceable or
not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group on the
Latest Practicable Date.
(c) DBS Asia does not have any interest, direct or indirect, in any assets which have been acquired or disposed of
by or leased to any member of the Group, or which are proposed to be acquired or disposed of by or leased to any
member of the Group since 31 December 2007, the date to which the latest published audited financial statements
of the Company were made up.
(d) DBS Asia has given and has not withdrawn its written consent to the issue of this circular with the inclusion of
its letter and references to its name in the form and context in which they are included.
(e) The letter and recommendation given by DBS Asia are given as of the date of this circular for incorporation
herein.
8. LITIGATION
No member of the Company and its subsidiaries is at present engaged in any
litigation or arbitration of material importance to the Company and its
subsidiaries and no litigation or claim of material importance to the Company
and its subsidiaries is known to the Directors or the Company to be pending or
threatened by or against any member of the Company and its subsidiaries.
9. DOCUMENTS AVAILABLE FOR INSPECTION
A copy of the Investment Agreement, the consent letter and the letter of advice
from DBS Asia are available for inspection at the principal place of business in
Hong Kong of the Company at Rooms 1105-1108, Gloucester Tower, The Landmark, 15
Queen's Road Central, Hong Kong during normal business hours from the date of
this circular up to and including 1 June 2008.
10. MISCELLANEOUS
(a) The English text of this circular shall prevail over the Chinese text.
(b) The registered and head office of the Company is situated at No. 482, Guanganmennei Avenue, Xuanwu District,
Beijing, the PRC.
(c) The place of business of the Company in Hong Kong is at c/o Huen Wong & Co. in association with Fried, Frank,
Harris, Shriver & Jacobson LLP 1105-1108 Gloucester Tower, The Landmark, 15 Queen's Road Central, Hong Kong.
(d) The Hong Kong share registrar and transfer office of the Company is Computershare Hong Kong Investor Services
Limited at 46/F, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong.
(e) The secretary to the Board of the Company is Mr. Zhou Gang. Mr. Zhou graduated from East China Institute of
Water Conservancy (currently known as Hehai University), and is a senior engineer.
(f) The Company has been using its best endeavour in finding a suitable candidate to assume the position of
qualified accountant, as required under Rule 3.24 of the Listing Rules (the ' Rule' ), since the effective date
of the Rule. Due to the practical difficulties in finding a candidate who has relevant experience in the power
industry, the Company has yet to appoint a qualified accountant as required under the Rule and the Company will
continue to use its best endeavour in finding a suitable candidate to assume such position as soon as
practicable.
NOTICE OF ANNUAL GENERAL MEETING
DATANG INTERNATIONAL POWER GENERATION CO. LTD.
(a sino-foreign joint stock limited company incorporated in the People's
Republic of China)
(Stock Code: 991)
NOTICE OF 2007 ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN that the 2007 annual general meeting (the ' AGM' ) of
Datang International Power Generation Co., Ltd. (the ' Company' ) will be held
at the multi-purpose function room of 3/F, CTS (HK) Grand Metro Park Hotel, No.
338 Guanganmennei Avenue, Xuanwu District, Beijing, the People's Republic of
China (the ' PRC' ) on 30 May 2008 (Friday) at
9:00 a.m. to consider and, if thought fit, pass the following resolutions:
A Ordinary Resolutions:
1. to consider and approve the ' Report of the board of directors of the Company (the ' Board' )' (including
independent non-executive directors report on work);
2. to consider and approve the ' Report of the supervisory committee of the Company for the year 2007' ;
3. to consider and approve the ' Financial report of the Company for the year 2007' ;
4. to consider and approve the ' Profit distribution plan for the year 2007' (Note 1);
5. to consider and approve the ' Resolution on the re-appointment of PricewaterhouseCoopers Zhong Tian CPAs Co,
Ltd. (' PwC Zhong Tian' ), and PricewaterhouseCoopers Certified Public Accountants, Hong Kong (' PwC' ) as
the Company's 2008 domestic and international auditors, respectively' (Note 2);
6. to consider and approve the ' Resolution on the Investment in the Construction of the Coal-based Natural Gas
Project in Kesheketeng' (Note 3);
7. to consider and approve the ' Resolution on the Provision of Guarantees for the Company's Investment and
Construction Projects' (Note 4);
8. to consider and approve the ' Resolution on the Provision of Guarantee for the Loan of Jiangxi Datang
International Xinyu Power Generation Company Limited, the wholly-owned subsidiary of the Company' (Note 5);
9. to consider and approve the ' Proposal to the General Meeting on Replacement of Supervisor (Note 6).
B Special Resolutions:
1. to consider and approve the ' Proposal on the Preparation of Medium-to-short-term Debt Financing' .
The Company intends to apply for medium-to-short-term debt financing facilities
of not more than RMB10 billion and submit the following to the general meeting
for approval:
(i) To approve, verify and ratify the Company's medium-to-short-term debt financing plan, and pursuant to
which a mandate be granted to the Company to issue medium-to-short-term debt financing in a principal
amount of not more than RMB10 billion and that such mandate be effective for a term of 12 months effective
from the date of approval by the Company's shareholders; and
(ii) To grant a mandate to any two directors of the Company to, with reference to the market conditions and the
Company's needs, decide and plan the relevant matters, including but not limited to, the final issue
size, term, issue method and interest rate, and to grant a mandate to any two directors of the Company to,
when deemed necessary, beneficial or in the interest of the Company, sign any necessary documents or take
any necessary actions regarding the effection of the plan or any additional matters related or relevant to
the plan.
2. to consider and approve the ' Proposal on Requesting the General Meeting to Grant a Mandate to the Board to
Issue New Shares Not More Than 20% of Each Class of Shares' (Note 7)
The Board agreed to request the general meeting to grant the following
mandates to the Board:
(1) Proposes, subject to note (2) of this special resolution, to generally and unconditionally authorise the
Board to, within 12 months from the date of approval of this special resolution at the AGM, exercise all
rights of the Company to place or issue, individually or jointly, domestic shares (A shares) and
overseas-listed foreign shares (H shares) and execute or grant any offers, agreements and arrangements
which may require the exercise of such rights;
(2) Pursuant to note (1) of this special resolution, the Board may place or issue, individually or jointly, A
shares and H shares with the respective number of A shares and H shares to be placed or issued,
individually or jointly, not more than 20% of the respective number of the issued A shares and H shares of
the Company at the date of passing this resolution;
(3) Subject to note (1) and note (2) of this special resolution, the Board may, within the given limits,
determine the respective number of A shares and H shares to be placed or issued, individually and jointly,
and
(4) Subject to notes (1), (2) and (3) of this special resolution and according to the actual condition of the
placement or issue of new A shares and new H shares, the Board be authorised to increase the registered
capital of the Company and make appropriate amendments to Articles 18 and 21 to the articles of association
of the Company (the ' Articles of Association' ).
CLOSURE OF THE COMPANY'S REGISTER OF MEMBERS FOR THE AGM
Holders of H shares of the Company (' H Shares' ) should note that, pursuant to
the Articles of Association, no transfer of H Shares will be registered from 1
May (Thursday) to 30 May 2008 (Friday), both dates inclusive. Holders of H
Shares whose names are registered in the register of members at the close of
business i.e. 4:30 p.m. on 30 April 2008 are entitled to attend the AGM and vote
for the distribution of dividend for the year of 2007. In order to be entitled
to the attendance of the AGM and the payment of dividend, holders of H Shares
are required to deposit the transfer document together with the relevant share
certificates at the H Share registrar of the Company, Computershare Hong Kong
Investor Services Limited, at Rooms 1712-16, 17th Floor, Hopewell Centre, 183
Queen's Road East, Wanchai, Hong Kong before 4:30 p.m. on 30 April 2008.
By Order of the Board
Zhou Gang
Secretary to the Board
Beijing, the PRC, 14 April 2008
Notes:
1. The 2007 profit distribution plan is as follows:
(1) Contributing 10% of the statutory surplus reserve fund in an amount of approximately RMB310,036,432.6, in
accordance with the net profit of the parent company based on the PRC GAAP;
(2) As at 31 December 2007, the Company's total number of shares was 11,734,083,473 shares (as there may be
further conversation of the US dollar convertible bonds into H Shares for the period from 1 January 2008 to the
record date for the Company's distribution of dividends), the Company proposed to distribute a dividend of
RMB0.12 per share and the total amount of the proposed cash dividends to be distributed is approximately
RMB1,408,090,017 (based on the total shares of the Company as at 31 December 2007).
(3) Under the International Accounting Standards, after the proposed distribution of cash dividends of
RMB1,408,090,017, the remaining undistributed profit amounts to RMB39,122,559. If there is no conversion of the
US dollars convertible bonds into H shares for the period from 1 January 2008 to the record date for the Company
's distribution of dividends, the full amount of RMB39,122,559 will be converted to discretionary surplus
reserve.
(4) Under the PRC GAAP, after the proposed distribution of cash dividends of RMB1,408,090,017, the remaining
undistributed profit amounts to RMB99,699,925. If there is no conversion of the US dollars convertible bonds
into H shares for the period from 1 January 2008 to the record date for the Company's distribution of
dividends, an amount of RMB39,122,559 will be fully converted to discretionary surplus reserve, and the
remaining undistributed profit would amount to RMB60,577,366.
(5) To distribute cash dividends and to adjust the relevant data in the Company's profit distribution proposal,
according to the total number of actually registered shares as at the record date for the dividend distribution.
2. The Board proposed to re-appoint the PwC Zhong Tian as the Company's domestic auditors for 2008 and to re-appoint
PwC as the Company's international auditors for 2008. It is recommended that the auditing fee of the Company for
the year 2008 to be RMB13.831 million.
3. About the ' Resolution on the Investment in the Construction of the Coal-based Natural Gas Project in Kesheketeng':
According to resolution of the sixth meeting of the sixth session of the Board
meeting, the Company has entered into the ' Inner Mongolia Datang
International Keqi Coal-based Gas Project Investment Cooperation Agreement' with
Beijing Gas Group Co., Ltd., China Datang Corporation (' CDC' ) and New Horizon
Capital Advisors Limited on 11 April 2008, and proposed to contribute jointly to
establish the Inner Mongolia Datang International Keqi Coal-based Gas Company
Limited (' Keqi Coal-based Gas Company' ), for the purpose of constructing the
4 billion-cubic metres/per annum coal-based natural gas project. The Company
contributes the capital in the proportion of 51%, in an amount of RMB2.8733
billion.
As CDC holds 33.74% of the issued share capital of the Company. Accordingly, the
entering into the ' Investment Agreement' between the Company and CDC
constitutes a connected transaction and has to be submitted to the general
meeting of the Company for consideration and approval. Under the Rules Governing
the Listing of Securities on The Stock Exchange of Hong Kong Limited in Hong
Kong (' Listing Rules' ), CDC, a connected person and its associates have to
abstain from voting in respect of this resolution.
For details of the ' Investment Agreement' , please refer to the announcement
of the Company dated 14 April 2008. The Company shall despatch a relevant
circular in accordance with the requirements of the Listing Rules in due course.
4. The Company is proposing to provide guarantees for the following investment and construction projects if needed:
(1) to provide joint-liability guarantee for the loan of the Company's subsidiary, Jiangsu Datang International
Lusigang Power Generation Company Limite, which will be applied to the construction of four 660 MW coal-fired
generation units, with a guarantee amount of not more than RMB4 billion;
(2) to provide joint-liability guarantee for the loan of the Company's subsidiary, Chongqing Datang International
Wulong Hydropower Development Company Limited, which will be applied to the construction of four 150 MW (600MW
in total) hydropower generation units, with a guarantee amount of not more than RMB2.8 billion;
(3) to provide joint-liability guarantee for the loan of the Company's subsidiary, Guangdong Datang International
Chaozhou Power Generation Company Limited, which will be applied to the construction of two 1,000 MW coal-fired
generation units, with a guarantee amount of not more than RMB3.8 billion;
(4) to provide joint-liability guarantee for the loan of the Company's subsidiary, Shanxi Datang International
Yungang Thermal Power Company Limited, which will be applied to the construction of two 300 MW thermal power
generation units, with a guarantee amount of not more than RMB1.3 billion;
(5) to provide joint-liability guarantee for the loan of the Company's subsidiary, Sichuan Datang International
Ganzi Hydropower Development Company Limited, which will be applied to the construction of four 650 MW
hydropower generation units, with a guarantee amount of not more than RMB4 billion;
(6) to provide joint-liability guarantee for the loan of the Company's wholly-owned subsidiary, Inner Mongolia
Datang International Xilinhaote Mining Company Limited, which will be applied to the construction of the project
of Unit 2 of the open-cut coal mine located east of Shengli Coal Mine Coal Mine, with a guarantee amount of not
more than RMB2 billion.
5. The Company is proposing to provide guarantee for the loan of RMB555.1 million of Xinyu Power Generation Company
Limited, the Company's wholly-owned subsidiary.
For details, please refer to the announcement of the fourth meeting of the sixth
session of the Board dated 14 January 2008.
6. Mr. Zhang Wantuo, external supervisor of the Company, has come to the retirement age and will no longer work at
Tianjin Jinneng Investment Company (' Tianjin Jinneng' ). Accordingly, Tianjin Jinneng recommended Mr. Zhang
Xiaoxu, its current Deputy Manager (Person-in-Charge) of Finance Department, to act as a supervisor of the Company,
and Mr. Zhang Wantuo will resign from his position as the supervisor of the Company.
The profile of Mr. Zhang Xiaoxu is as follows:
Zhang Xiaoxu, aged 45, University graduate, is a senior accountant, presently
Vice President of Financial Department of (Person-in Charge) Tianjin Jinneng.
Mr. Zhang began his career with First Construction Company of Fushun City,
Liaoning Province in 1982, and had been successively Chief Accountant of
Liaoning Power Plant, and Head of Finance, Deputy Chief Accountant and Chief
Accountant at Liaoning Nenggang Power Generation Co., Ltd.. From September 2005
to November 2007, Mr. Zhang was the Financial Controller of Tianjin SDIC-Jinneng
Power Generation Co., Ltd.. He has been the Deputy Manager of Financial
Department (Person-in-Charge) of Tianjin Jinneng since November 2007.
The term of the proposed appointment of Mr. Zhang will be from the date of
passing this resolution to 30 June 2010. If elected, Mr. Zhang will not be
entitled to any fee of acting as the supervisor of the Company. As at the date
of this notice, Mr. Zhang does not have any interest in the shares of the
Company within the meaning of Part XV of the Securities and Futures Ordinance.
He has not been subjected to any public sanctions by statutory or regulatory
authority. Save as disclosed above, Mr. Zhang does not hold any directorships in
any public listed companies in the past three years and are not connected with
any directors, senior management or substantial or controlling shareholders (as
defined in the Listing Rules) of the Company. Save as disclosed above, there are
no other matters concerning the proposed appointment of Mr. Zhang as the
supervisor of the Company that need to be brought to the attention of the
shareholders and the Stock Exchange and there are no other matters which shall
be disclosed pursuant to Rule 13.51(2)(h) to (v) of the Listing Rules.
7. The general mandate referred to in special resolution numbered (2) shall be exercised within the Relevant Period.
' Relevant Period' means the period from the passing of this special
resolution until the earlier of:
(i) the conclusion of the next annual general meeting of the Company;
(ii) the expiration of the 12 months period following the passing of this special resolution; and
(iii) the revocation or variation of the authority given to the Board under this special resolution by a resolution
of the Company's shareholders in general meetings.
8. Others Matters
(1) Holders of H Shares are reminded that pursuant to the Articles of Association, the register of members of the
Company will be closed from 1 May to 30 May 2008 (both dates inclusive). Shareholders whose names appear on the
register of members of the Company at the close of business, i.e. 4:30 p.m. on 30 April 2008 are entitled to
attend and vote at the AGM.
(2) Every holders of H Shares entitled to attend and vote at the AGM, is entitled to appoint one or more proxies to
attend and vote on his/her behalf. A proxy need not be a shareholder of the Company.
(3) If shareholder has appointed more than one proxy to attend the AGM, the proxies can only exercise their voting
rights by way of poll.
(4) To be valid, holders of H Shares must deliver the proxy form and, if such proxy is signed by a person on behalf
of the appointer pursuant to a power of attorney or other authority, a notarised copy of that power of attorney
or other authority, to the Company's H Share registrar, Computershare Hong Kong Investor Services Limited of
46/F, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong, in not less than 24 hours before the time
scheduled for holding the AGM.
(5) Holders of H Shares who wish to attend the AGM are required to return the notice of attendance by hand, post,
cable or fax to the Company's registered address on or before 9 May 2008. Completion and return of the proxy
form and notice of attendance will not preclude a shareholder of the Company from attending and voting at the
AGM in person.
(6) The AGM is expected to last for half day. Shareholders attending the AGM shall be responsible for their own
travel and accommodation expenses.
The Company's registered address:
Office of President
Datang International Power Generation Co., Ltd.
8/F., No. 482 Guanganmennei Avenue
Xuanwu District
Beijing, the PRC
Postcode: 100053
Telephone: (8610) 8358 2062 Fax: (8610) 8397 7083
As at the date of this notice, the directors of the Company are:
Zhai Ruoyu, Zhang Yi, Hu Shengmu, Fang Qinghai, Zhou Gang, Liu Haixia, Guan
Tiangang,
Su Tiegang, Ye Yonghui, Li Gengsheng, Xie Songlin*, Yu Changchun*, Liu Chaoan*
and Xia Qing*
* Independent non-executive directors
This information is provided by RNS
The company news service from the London Stock Exchange
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