Continuing Connected Transactions
Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong
Limited take no responsibility for the contents of this announcement, make no
representation as to its accuracy or completeness and expressly disclaim any
liability whatsoever for any loss howsoever arising from or in reliance upon
the whole or any part of the contents of this announcement.
DATANG INTERNATIONAL POWER GENERATION CO., LTD.
(a sino-foreign joint stock limited company incorporated in the People's
Republic of China)
(Stock Code: 00991)
ANNOUNCEMENT
CONTINUING CONNECTED TRANSACTIONS
SALE AND PURCHASE AGREEMENT OF CHEMICAL PRODUCTS AND MATERIALS
On 25 April 2014, Energy and Chemical Marketing Company, a wholly-owned
subsidiary of the Company, entered into the Sale and Purchase Agreement of
Chemical Products and Materials with certain subsidiaries of the Company for
the implementation of continuing connected transactions set out below:
I. Purchase of natural gas and Chemical Products by Energy and Chemical
Marketing Company from, and sale of Chemical Materials by Energy and
Chemical Marketing Company to, Keqi Coal-based Gas Company
(1) Energy and Chemical Marketing Company entered into the Framework Agreement
of Sale of Natural Gas with Keqi Coal-based Gas Company, pursuant to which,
Energy and Chemical Marketing Company agreed to purchase natural gas from
Keqi Coal-based Gas Company with an annual cap for transaction amount of
RMB4.029 billion for a term commencing from 18 December 2013 to 31 December
2014.
(2) Energy and Chemical Marketing Company entered into the Sale and Purchase
Contract of Chemical Products (Keqi) with Keqi Coal-based Gas Company;
pursuant to which, Energy and Chemical Marketing Company agreed to purchase
Chemical Products from Keqi Coal-based Gas Company with an annual cap for
transaction amount of RMB623 million for a term commencing from 18 December
2013 to 31 December 2014.
(3) Energy and Chemical Marketing Company entered into the Procurement Contract
of Chemical Products (Keqi) with Keqi Coal-based Gas Company; pursuant to
which, Energy and Chemical Marketing Company agreed to sell Chemical
Materials to Keqi Coal-based Gas Company with an annual cap for transaction
amount of RMB135 million for a term commencing from 1 January 2014 to 31
December 2014.
II. Purchase of Chemical Products by Energy and Chemical Marketing Company
from, and sale of Chemical Materials by Energy and Chemical Marketing
Company to, Duolun Coal Chemical Company
Energy and Chemical Marketing Company entered into the Sale and Purchase
Contract of Chemical Products (Duolun) with Duolun Coal Chemical Company,
pursuant to which, (1) Energy and Chemical Marketing Company agreed to
purchase Chemical Products from Duolun Coal Chemical Company with an annual
cap for transaction amount of RMB3.63 billion; (2) Energy and Chemical
Marketing Company agreed to sell Chemical Materials to Duolun Coal Chemical
Company with an annual cap for transaction amount of RMB1.16 billion. The term
of the agreement for a term commencing from 1 January 2014 to 31 December
2014.
LISTING RULES IMPLICATIONS
As at the date of this announcement, CDC is the controlling Shareholder of the
Company, which together with its subsidiaries holds approximately 34.71% of the
issued share capital of the Company. Since CDC holds 10% or more of the equity
interests in each of Keqi Coal-based Gas Company and Duolun Coal Chemical
Company, which are subsidiaries of the Company, such subsidiaries are therefore
connected persons of the Company. The transactions under the Sale and Purchase
Agreement of Chemical Products and Materials constitute continuing connected
transactions of the Company.
Since (i) one or more of the applicable percentage ratios (as defined under
Rule14.07 of the Listing Rules) in respect of the aggregated transaction amount
for purchase of natural gas and Chemical Products under the Framework Agreement
of Sale of Natural Gas and the Sale and Purchase Contract of Chemical Products
(Keqi); and (ii) one or more of the applicable percentage ratios (as defined
under Rule14.07 of the Listing Rules) in respect of the transaction amount for
purchase of Chemical Products under the Sale and Purchase Contract of Chemical
Products (Duolun) are all higher than 5%, the transactions contemplated in (i)
and (ii) are subject to the reporting and announcement requirements, as well as
the independent Shareholders' approval requirements under Chapter 14A of the
Listing Rules.
Since all of the applicable percentage ratios (as defined in Rule 14.07 of the
Listing Rules) in respect of the transaction amount for the sale of Chemical
Materials under each of the Procurement Contract of Chemical Products (Keqi)
and the Sale and Purchase Contract of Chemical Products (Duolun) is higher than
0.1% but lower than 5%, the transactions for the sale of Chemical Materials
under above-mentioned contracts contemplated thereunder are subject to the
reporting and announcement requirements, but are exempted from the independent
Shareholders' approval requirements under Chapter 14A of the Listing Rules.
The Company will disclose the relevant details of the above transactions in the
next annual report and accounts of the Company in accordance with the relevant
requirements as set out in Chapter 14A of the Listing Rules. A circular
containing details of the purchase of natural gas and Chemical Products under
the Framework Agreement of Sale of Natural Gas, the Sale and Purchase Contract
of Chemical Products (Keqi) and the Sale and Purchase Contract of Chemical
Products (Duolun), a letter from the independent board committee of the Company
and a letter from the independent financial advisor, both advising the terms of
the purchase of natural gas and Chemical Products under the Framework Agreement
of Sale of Natural Gas, the Sale and Purchase Contract of Chemical Products
(Keqi) and the Sale and Purchase Contract of Chemical Products (Duolun), will
be dispatched to Shareholders on or before 20 May 2014.
PURCHASE OF NATURAL GAS AND CHEMICAL PRODUCTS FROM KEQI COAL-BASED GAS COMPANY
BY ENERGY AND CHEMICAL MARKETING COMPANY
1. Framework Agreement of Sale of Natural Gas
Agreement Date: 25 April 2014
Parties to Agreement: Energy and Chemical Marketing Company and Keqi
Coal-based Gas Company
Major Terms:
(1) Subject Matter: Energy and Chemical Marketing Company agreed to purchase
natural gas produced by Keqi Coal-based Gas Company within the term of the
agreement.
(2) Transaction Price: 0.5% discount (subject to change) to the price fixed
according to the pricing principle of the Sale and Purchase Agreement of
Coal-based Gas (Energy and Chemical - PetroChina), whereas the 0.5%
represents the rate charged by Energy and Chemical Marketing Company for
provision of co-ordination and management services with reference to the
average market rate and on a fair and reasonable basis.
The pricing principles as stipulated in the Sale and Purchase Agreement of
Coal-based Gas (Energy and Chemical - PetroChina) are as follows:
a. the initial agreed price is RMB2.75 per m3 (13% VAT included);
b. the agreed price is only applicable to coal-based natural gas with the
lower calorific value of not lower than 8,000kCal/m3. Where the lower
calorific value of coal-based natural gas delivered by the vendor is lower
than 8,000kCal/m3 on any day within the term of the agreement, the agreed
price applicable for actual settlement shall be discounted as follow:
Discounted agreed price = Agreed price x (Average calorific value of
coal-based natural gas of the day/8,000);
c. the agreed price mentioned above is effective for the period between the
date on which the agreement is signed and 31 December 2016. The agreed
price applicable for 1 January 2017 onwards can be adjusted according to
the current pricing base and the prevailing price and market conditions;
d. where the State provides or recommends that the calculation of price of
natural gas shall be based on the calorific value, parties to the agreement
shall confirm to adopt the agreed price based on the calorific value and
calculated according to principles as stipulated by the State and the Sale
and Purchase Agreement of Coal-based Gas (Energy and Chemical -
PetroChina).
(3) Settlement and Payment: Parties to the agreement shall settle all payments
according to the invoice confirmed by both parties and the term of the
agreement, 10 days shall constitute a settlement cycle (3 settlements per
month).
(4) Term: from 18 December 2013 to 31 December 2014
The Company confirms that each of the applicable percentage ratios under the
transaction amount in respect of purchase of natural gas under the Framework
Agreement of Sale of Natural Gas for the period from 18 December 2013 to the
date of this announcement are below the de minimis threshold under Chapter 14A
of the Listing Rules.
(5) The agreement shall become effective once it is executed by the
authorised representatives of both parties and the common seals of both
parties are affixed. Upon expiration of the agreement where no change is to
be made by the parties to the terms of the agreement and subject to
re-compliance with applicable reporting, announcement and independent
Shareholders' requirements (as the case maybe) under Chapter 14A of the
Listing Rules, it shall be extended for one year automatically.
Annual Cap
The annual cap of transactions under the Framework Agreement of Sale of Natural
Gas for the year ending 31 December 2014 is expected to be RMB4.029 billion
which is based on: (i) the volume of natural gas expected to be produced and
sold by Keqi Coal-based Gas Company to Energy and Chemical Marketing Company
for the year ending 31 December 2014; and (ii) the price of natural gas as
provided in the agreement.
Historical Transaction Amount
For the year ended 31 December 2013, the transaction amount of sale of natural
gas by Keqi Coal-based Gas Company to Energy and Chemical Marketing Company did
not reach the de minimis threshold under Chapter 14A of the Listing Rules.
For the two years ended 31 December 2011 and 31 December 2012, no natural gas
was sold by Keqi Coal-based Gas Company to Energy and Chemical Marketing
Company.
2. Sale and Purchase Contract of Chemical Products (Keqi)
Agreement Date: 25 April 2014
Parties to Agreement: Energy and Chemical Marketing Company and Keqi Coal-based
Gas Company
Major Terms:
(1) Subject Matter : Energy and Chemical Marketing Company agreed to
purchase Chemical Products produced by Keqi Coal-based Gas Company
within the term of the agreement
(2) Transaction Price: Energy and Chemical Marketing Company will sell
Chemical Products at prevailing market rates and a 1% discount to
such market rate of the Chemical Products shall be made for the
settlement of payment with Keqi Coal-based Gas Company. Such 1%
discount represents the rate charged by Energy and Chemical Marketing
Company for provision of co-ordination and management services with
reference to the average market rate and on a fair and reasonable
basis.
(3) Settlement and Payment: During the term of the contract, Energy and
Chemical Marketing Company shall pay Keqi Coal-based Gas Company the
amount for Chemical Products on a cash-on-delivery basis and the
payment shall be settled every Friday during the term of the
agreement.
(4) Term: from 18 December 2013 to 31 December 2014
The Company confirms that each of the applicable percentage ratios
under the transaction amount in respect of purchase of Chemical
Products under the Sale and Purchase Contract of Chemical Products
(Keqi) for the period from 18 December 2013 to the date of this
announcement are under the de minimis threshold under Chapter 14A of
the Listing Rules.
(5) The agreement shall become effective once it is executed by the
authorised representatives of both parties and the common seals of
both parties are affixed. Upon expiration of the agreement where no
change is to be made by parties to the terms of the agreement and
subject to re-compliance with applicable reporting, announcement and
independent Shareholders' requirements (as the case maybe) under
Chapter 14A of the Listing Rules, it shall be extended for one year
automatically.
Annual Cap
The annual cap of transactions under the Sale and Purchase Contract of Chemical
Products (Keqi) for the year ending 31 December 2014 is expected to be
approximately RMB623 million which is based on: (i) the volume of Chemical
Products expected to be sold by Keqi Coal-based Gas Company to Energy and
Chemical Marketing Company for the year ending 31 December 2014; and (ii) the
expected price of Chemical Products.
Historical Transaction Amount
For the year ended 31 December 2013, the transaction amount for the purchase of
Chemical Products by Energy and Chemical Marketing Company from Keqi Coal-based
Gas Company is below the de minimis threshold under Chapter 14A of the Listing
Rules.
No transaction in respect of purchase of Chemical Products has been made
between Energy and Chemical Marketing Company and Keqi Coal-based Gas Company
for the two years ended 31 December 2011 and 31 December 2012.
SALE OF CHEMICAL MATERIALS BY ENERGY AND CHEMICAL MARKETING COMPANY TO KEQI
COAL-BASED GAS COMPANY
Procurement Contract of Chemical Products (Keqi)
Agreement Date: 25 April 2014
Parties to Agreement: Energy and Chemical Marketing Company and Keqi Coal-based
Gas Company
Major Terms:
(1) Subject Matter: Energy and Chemical Marketing Company agreed to sell
Chemical Materials to Keqi Coal-based Gas Company during the term of the
contract.
During the term of the contract, based on their actual needs, Keqi
Coal-based Gas Company will from time to time send letters to Energy
and Chemical Marketing Company to set out the specific requirements of
Chemical Materials. Pursuant to the requirements, Energy and Chemical
Marketing Company will sign the contracts with the supplier company
after price inquiry ("Specific Procurement Contracts").
(2) Transaction Price: Energy and Chemical Marketing Company purchases
Chemical Materials at market rates (In principle, the supplier is to be
determined by the method of request for quotation; the bidder with the
lowest rate will be appointed as the supplier) and a 1% premium on the
price under the winning bidder contract shall be made for the settlement
of payment with Keqi Coal-based Gas Company, whereas such 1% premium
represents the rate charged by Energy and Chemical Marketing Company
for provision of co-ordination and management services with reference
to the average market rate and on a fair and reasonable basis.
(3) Settlement and Payment: Keqi Coal-based Gas Company shall pay the
contracted amount to Energy and Chemical Marketing Company in advance
and the balance shall be settled based on the actual delivery quantity
as confirmed by both parties. In the event that the actual amount is
less than the amount already paid by Keqi-Coal-based Company, Energy
and Chemical Marketing Company shall refund such differences to
Keqi-Coal-based Company and in the event that the actual amount is more
than the amount already paid by Keqi-Coal-based Company,
Keqi-Coal-based Company shall pay such differences to Energy and
Chemical Marketing Company.
(4) Term: 1 year from 1 January 2014 to 31 December 2014
The Company confirms that each of the applicable percentage ratios in
respect of the Procurement Contract of Chemical Products (Keqi) for the
period from 1 January 2014 to the date of this announcement is below
the de minimis threshold under Chapter 14A of the Listing Rules.
(5) The agreement shall become effective once it is executed by the
authorised representatives of both parties and the common seals of both
parties are affixed. Upon expiration of the agreement where no change is
to be made by parties to the terms of the agreement and subject to
re-compliance with applicable reporting, announcement and independent
Shareholders' requirements (as the case maybe) under Chapter 14A of the
Listing Rules, it shall be extended for one year automatically.
Annual Cap
It is expected that the maximum transaction amount in respect of the
Procurement Contract of Chemical Products (Keqi) for the year ended 31 December
2014 is RMB135 million; such amount is determined with reference to (i) the
anticipated volume of the delegate procurement of Chemical Materials by Energy
and Chemical Marketing Company for Keqi Coal-based Gas Company for the year
ending 31 December 2014; and (ii) the estimated price of Chemical Materials.
Historical Transaction Amount
No transaction in respect of sale of Chemical Material has been made between
Energy and Chemical Marketing Company and Keqi Coal-based Gas Company for the
previous 3 years.
PURCHASE OF CHEMICAL PRODUCTS BY ENERGY AND CHEMICAL MARKETING COMPANY FROM, AND
SALE OF CHEMICAL MATERIALS BY ENERGY AND CHEMICAL MARKETING COMPANY TO, DUOLUN
COAL CHEMICAL COMPANY
Sale and Purchase Contract of Chemical Products (Duolun)
Agreement Date: 25 April 2014
Parties to Agreement: Energy and Chemical Marketing Company and Duolun Coal
Chemical Company
Major Terms:
(1) Subject Matter:
(i) Energy and Chemical Marketing Company agreed to purchase Chemical
Products from Duolun Coal Chemical Company during the term of contract.
(ii) Energy and Chemical Marketing Company agreed to sell Chemical
Materials to Duolun Coal Chemical Company during the term of contract.
During the term of the contract, based on their actual needs, Duolun
Coal Chemical Company will from time to time send letters to Energy
and Chemical Marketing Company to set out the specific requirements of
Chemical Materials. Pursuant to the requirements, Energy and Chemical
Marketing Company will sign the contracts with the supplier company
after price inquiry.
(2) Transaction Price:
(i) Transaction Price of the purchase of Chemical Products
The transaction price of the purchase of Chemical Products is
determined by arms-length negotiation between the parties and taking
reference to prevailing market rate.
(ii) Transaction Price of the sale of Chemical Materials
Energy and Chemical Marketing Company will purchase Chemical Materials
at market rates (In principle, the supplier is to be determined by the
method of request for quotation; the bidder with the lowest rate will
be appointed as the supplier.) and a 1% premium on the price under the
winning bidder contract shall be made for the settlement of payment
with Duolun Coal Chemical Company.
Such 1% premium set out in (ii) above represents the rate charged by
Energy and Chemical Marketing Company for provision of co-ordination
and management services which is determined with reference to the
average market rate and on a fair and reasonable basis.
(3) Settlement and Payment:
(i) Settlement and Payment of the purchase of Chemical Products
Energy and Chemical Marketing Company shall pay Duolun Coal Chemical
Company the amount for Chemical Products on a cash-on- delivery basis
for the purchase of Chemical Products.
(ii) Settlement and Payment of the sale of Chemical Materials
Duolun Coal Chemical Company shall pay the contracted amount to Energy
and Chemical Marketing Company in advance and the balance shall be
settled based on the actual delivery quantity as confirmed by both
parties. In the event that the actual amount is less than the amount
already paid by Duolun Coal Chemical Company, Energy and Chemical
Marketing Company shall refund such differences to Duolun Coal
Chemical Company and in the event that the actual amount is more
than the amount already paid by Duolun Coal Chemical Company, Duolun
Coal Chemical Company shall pay such differences to Energy and
Chemical Marketing Company.
(4) Term: 1 year from 1 January 2014 to 31 December 2014
The Company confirms that (i) each of the applicable percentage ratios
under the transaction amount in respect of purchase of Chemical Products
under the Sale and Purchase Contract of Chemical Products (Duolun) for
the period from 1 January 2014 to the date of this announcement is under
the de minimis threshold under Chapter 14A of the Listing Rules; (ii)
each of the applicable percentage ratios under the transaction amount in
respect of sale of Chemical Materials under the Sale and Purchase
Contract of Chemical Products (Duolun) for the period from 1 January 2014
to the date of this announcement is under the de minimis threshold under
Chapter 14A of the Listing Rules.
(5) The Sale and Purchase Contract of Chemical Products (Duolun) shall become
effective once it is executed by both parties. Upon expiration of the
agreement where no change is to be made by parties to the terms of the
agreement and subject to re-compliance with applicable reporting,
announcement and independent Shareholders' requirements (as the case maybe)
under Chapter 14A of the Listing Rules, it shall be extended for one year
automatically.
Annual Cap
It is expected that the maximum transaction amount in respect of purchase of
Chemical Products and sale of Chemical Materials, both under the Sale and
Purchase Contract of Chemical Products (Duolun), for the year ending 31
December 2014 is RMB3.63 billion and RMB1.16 billion respectively; such amount
is determined with reference to (i) the anticipated volume of Chemical Products
to be purchased by Energy and Chemical Marketing Company from Duolun Coal
Chemical Company;(ii) the anticipated volume of the delegate procurement of
Chemical Materials by Energy and Chemical Marketing Company for Duolun Coal
Chemical Company for the year ending 31 December 2014; and (iii) the estimated
price of Chemical Products and Chemical Materials.
Historical Transaction Amount
No purchase of Chemical Products and no sale of Chemical Materials were made by
Energy and Chemical Marketing Company with Duolun Coal Chemical Company for the
previous 3 years.
PROCEDURES FOR DETERMINATION OF PRICING POLICY
The mechanism by which the transaction prices of relevant products under the
Sale and Purchase Agreement of Chemical Products and Materials were determined
is as follows:
(1) Purchase of Chemical Products by Energy and Chemical Marketing Company
from Keqi Coal-based Gas Company and Duolun Coal Chemical Company
(i) Extended settlement method (i.e. listing for sale) was mainly used
for the purchase of polypropylene from Duolun Coal Chemical Company.
In other words, pricing meeting will be held regularly by Energy
and Chemical Marketing Company and the relevant business division
will collect and analyse the selling price and trends of similar
products. Selling price and settlement price of polypropylene will
be determined by a pricing committee after due consideration of
various factors such as proposed sales volume, inventories and price
trend.
(ii) For the purchase of other Chemical Products, the selling price
was determined by way of request of quotation tendering. In other
words, the business division of Energy and Chemical Marketing
Company will conduct tendering by issuing quotation request
documents to eligible trading companies and downstream production
units in PRC based on the sales plan and product quality report
provided by Keqi Coal-based Gas Company and Duolun Coal Chemical
Company. Pricing meeting will be held by the pricing committee.
The selling price of products will be determined based on the
result of quotation request and after due analysis of the
information on market trends of relevant products collected by
the business division. Settlement of payment with Keqi
Coal-based Gas Company and Duolun Coal Chemical Company will
be made in accordance with the selected principle for settlement.
(2) Sale of Chemical Materials by Energy and Chemical Marketing Company
to Keqi Coal-based Gas Company and Duolun Coal Chemical Company
The business division of Energy and Chemical Marketing Company will
send letter of quotation request to each of the suppliers, and
complete the quotation before the closing date. Overall supervision
will be maintained by supervisory auditing staff. Upon receipt of
the quotations, pricing meeting will be held by the pricing
committee to determine the bid price of the purchase, which,
in principle, the bidder with the lowest rate will be the winning
bidder. Settlement of payment with Keqi Coal-based Gas Company
and Duolun Coal Chemical Company will be made in accordance with
the selected principle for settlement.
(3) Purchase of Natural Gas from Keqi Coal-based Gas Company by Energy
and Chemical Marketing Company
Pursuant to the Sale and Purchase Agreement of Coal-based Gas
(Energy and Chemical – PetroChina), the sales representatives of
the parties will verify the sales volume of natural gas every day
and calculate the unit selling price of natural gas based on the
calorific value. Settlement of payment with Keqi Coal-based Gas
Company will be made in accordance with the selected principle
for settlement.
(4) Co-ordination and management service fee charged by Energy and
Chemical Marketing Company
The level of management fee is determined by Energy and Chemical
Marketing Company with reference to the investigation and research
results on the fee of provision of management service for sale
and purchase of similar chemical products and materials charged
by other independent third parties and after negotiation with
Keqi Coal-based Gas Company and Duolun Coal Chemical Company.
REASONS FOR, AND BENEFITS OF, ENTERING INTO THE SALE AND PURCHASE
AGREEMENT OF CHEMICAL PRODUCTS AND MATERIALS
Energy and Chemical Marketing Company is a company specialised in selling
coal-based chemical products, and is fully qualified for the sale and
operation of relevant products and holds trading permits for hazardous
chemical products. In addition, Energy and Chemical Marketing Company
has also developed its competitive edges in terms of the sale of
coal-based chemical products, relationships with suppliers and logistics,
providing a reliable supply of raw materials and sale channel to
affiliated corporations engaged in the business of coal-based chemical
products, thereby securing a safe environment for ordinary production
and operation activities. Meanwhile, economy of scale can be generated
by the centralised procurement and sale activities of Energy and
Chemical Marketing Company, thus effectively controlling the bulk
purchase cost of raw materials incurred by affiliated corporations
engaged in the business of coal-based chemical products and enhancing
the advantages of regional sale of products, which can also rationalise
the deployment of resources and control sales and marketing expenses in
a reasonable way for the ultimate goal of maximising the profit of the
Company. As a result, Energy and Chemical Marketing Company agreed to
sell Chemical Materials to Keqi Coal-based Gas Company and Duolun Coal
Chemical Company and purchase natural gas and Chemical Products from
Keqi Coal-based Gas Company and Duolun Coal Chemical Company.
The Directors (including the views of the independent non-executive
Directors) are of the view that the terms in respect of the sale of
Chemical Materials under the Procurement Contract of Chemical Products
(Keqi) and the Sale and Purchase Contract of Chemical Products (Duolun)
are fair and reasonable, have been entered into after arm's length
negotiation between all parties thereto and determined on normal
commercial terms, and are in the best interests of the Company and its
Shareholders as a whole.
The Directors (excluding the views of the independent non-executive
Directors, whose views will be contained in the circular to be despatched
to the Shareholders after considering the views of independent financial
adviser) are of the view that the terms in respect of the purchase of
natural gas and Chemical Products under the Framework Agreement of Sale
of Natural Gas, the Sale and Purchase Contract of Chemical Products
(Keqi) and the Sale and Purchase Contract of Chemical Products (Duolun),
are fair and reasonable, have been entered into after arm's length
negotiation between all parties thereto and determined on normal
commercial terms, and are in the best interests of the Company and its
Shareholders as a whole.
None of the Directors has material interest in the Sale and Purchase
Agreement of Chemical Products and Materials. In accordance with the
requirements of the Listing Rules of the Shanghai Stock Exchange,
those connected Directors, including Chen Jinhang, Hu Shengmu and
Fang Qinghai, have abstained from voting at the Board meeting for
approval of the above-mentioned transactions; Connected Director
Mr. Li Gengsheng has abstained from voting at the Board meeting for
entering into the Sale and Purchase Contract of Chemical Products
(Keqi), Procurement Contract of Chemical Products (Keqi) and the
Framework Agreement of Sale of Natural Gas and the transactions
contemplated thereunder.
INFORMATION OF PARTIES TO AGREEMENTS
1. The Company is principally engaged in the construction and
operation of power plants, the sale of electricity and thermal
power, the repair, maintenance and tuning of power equipment
and power related technical services. The Company's main
service areas are in the PRC.
2. Energy and Chemical Marketing Company is a wholly-owned
subsidiary of Datang Energy and Chemical Company Limited which
is also a wholly-owned subsidiary of the Company. It was duly
established in May 2009 with a registered capital of RMB50 million.
Energy and Chemical Marketing Company is mainly engaged in the
import and export of organic and inorganic chemical products and
products and technologies under dealership and developed in-house.
3. Duolun Coal Chemical Company was duly incorporated on 19 August
2009 with a registered capital of RMB4,050 million. Duolun Coal
Chemical Company is principally responsible for the construction
and operation of the coal-based olefin project with an annual
output of 460,000 tonnes. The shareholding structure of Duolun
Coal Chemical Company is as follow: Datang Energy and Chemical
Company Limited, a wholly-owned subsidiary of the Company, holds
60% of its equity interests, and CDC holds 40% of its equity
interests.
4. Keqi Coal-based Gas Company was duly incorporated on 10 December
2010 with a registered capital of RMB392 million. It is mainly
responsible for the production and sale of coal-based gas, tar,
naphtha, crude phenol, sulphur and thiamine, technical consultation
of coal-based chemicals and equipment inspection. The shareholding
structure of Keqi Coal-based Gas Company is as follow: Datang
Energy and Chemical Company Limited, a wholly-owned subsidiary
of the Company, Beijing Gas Group Co., Ltd., CDC and Tianjin Jinneng
Investment Company, holds 51%, 34%, 10% and 5% of its equity
interests, respectively.
5. CDC was established on 9 March 2003 with a registered capital of
RMB18.109 billion. It is principally engaged in the development,
investment, construction, operation and management of power energy,
organization of power (thermal) production and sales; manufacturing,
repair and maintenance of power equipment; power technology
development and consultation; power engineering, contracting and
consultation of environmental power engineering; development of
new energy as well as development and production of power related
coal resources.
LISTING RULES IMPLICATIONS
As at the date of this announcement, CDC is the controlling Shareholder
of the Company, which together with its subsidiaries holds approximately
34.71% of the issued share capital of the Company. Since CDC holds 10%
or more of the equity interests in each of Keqi Coal-based Gas Company
and Duolun Coal Chemical Company, which are subsidiaries of the Company,
such subsidiaries are therefore connected persons of the Company. The
transactions under the Sale and Purchase Agreement of Chemical Products
and Materials constitute continuing connected transactions of the Company.
Since (i) one or more of the applicable percentage ratios (as defined
under Rule14.07 of the Listing Rules) in respect of the aggregated
transaction amount for purchase of natural gas and Chemical Products
under the Framework Agreement of Sale of Natural Gas and the Sale
and Purchase Contract of Chemical Products (Keqi); and (ii) one or
more of the applicable percentage ratios (as defined under Rule14.07
of the Listing Rules) in respect of the transaction amount for
purchase of Chemical Products under the Sale and Purchase Contract
of Chemical Products (Duolun) are all higher than 5%, the transactions
contemplated in (i) and (ii) are subject to the reporting and
announcement requirements, as well as the independent Shareholders'
approval requirements under Chapter 14A of the Listing Rules.
Since all of the applicable percentage ratios (as defined in Rule 14.07
of the Listing Rules) in respect of the transaction amount for the sale
of Chemical Materials under each of the Procurement Contract of Chemical
Products (Keqi) and the Sale and Purchase Contract of Chemical Products
(Duolun) are higher than 0.1% but lower than 5%, the contracts
above-mentioned and the transactions contemplated thereunder are subject
to the reporting and announcement requirements, but are exempted from
the independent Shareholders' approval requirements under Chapter 14A
of the Listing Rules.
The Company will disclose the relevant details of the above transactions
in the next annual report and accounts of the Company in accordance with
the relevant requirements as set out in Chapter 14A of the Listing Rules.
A circular containing details of the purchase of natural gas and Chemical
Products under the Framework Agreement of Sale of Natural Gas, the Sale
and Purchase Contract of Chemical Products (Keqi) and the Sale and
Purchase Contract of Chemical Products (Duolun), a letter from the
independent board committee of the Company and a letter from the
independent financial advisor, both advising the terms of the purchase
of natural gas or Chemical Products under the Framework Agreement of Sale
of Natural Gas, the Sale and Purchase Contract of Chemical Products (Keqi)
and the Sale and Purchase Contract of Chemical Products (Duolun), will be
dispatched to Shareholders on or before 20 May 2014.
Any Shareholder with a material interest in the transactions and its
associates will abstain from voting at the General Meeting to be held by
the Company, to, among others, consider and approve the purchase of
natural gas and Chemical Products under the Framework Agreement of Sale
of Natural Gas, the Sale and Purchase Contract of Chemical Products (Keqi)
and the Sale and Purchase Contract of Chemical Products (Duolun).
As at the date of this announcement, CDC together with its subsidiaries
holds approximately 34.71% of the issued share capital of the Company.
Since CDC holds certain equity interests in Keqi Coal-based Gas Company
and Duolun Coal Chemical Company. Therefore, CDC and its associates shall
abstain from voting at the General Meeting to approve the purchase of
natural gas and Chemical Products under the Framework Agreement of Sale of
Natural Gas, the Sale and Purchase Contract of Chemical Products (Keqi)
and the Sale and Purchase Contract of Chemical Products (Duolun) in
accordance with the requirements of the Listing Rule.
As at the date of this announcement, Tianjin Jinneng Investment Company
holds approximately 9.74% of the issued share capital of the Company and
5% equity interest in Keqi Coal-based Gas Company. Therefore, Tianjin
Jinneng Investment Company, as a connected Shareholder that has interest
in the relevant transactions, shall abstain from voting at the General
Meeting to approve the purchase of natural gas and Chemical Products
under the Framework Agreement of Sale of Natural Gas and the Sale and
Purchase Contract of Chemical Products (Keqi) in accordance with the
requirements of the Listing Rules.
INDEPENDENT BOARD COMMITTEE AND INDEPENDENT FINANCIAL ADVISOR
An independent board committee comprising the independent non-executive
Directors will be formed to advise the independent shareholders on the
terms of the purchase of natural gas and Chemical Products under the
Framework Agreement of Sale of Natural Gas, the Sale and Purchase Contract
of Chemical Products (Keqi) and the Sale and Purchase Contract of
Chemical Products (Duolun).
The Company will appoint an independent financial advisor to advise the
independent board committee of the Company and the independent
shareholders on the terms of the purchase of natural gas and Chemical
Products under the Framework Agreement of Sale of Natural Gas, the
Sale and Purchase Contract of Chemical Products (Keqi) and the Sale
and Purchase Contract of Chemical Products (Duolun).
DEFINITIONS
In this announcement, unless the context otherwise requires, the following
expressions have the following meanings:
"A Shares" the domestic ordinary shares of the Company with
a nominal value of RMB1.00 each, which are
listed on the Shanghai Stock Exchange
"associate(s)" has the meaning ascribed to it under the Listing
Rules
"Board" the board of Directors of the Company
"CDC" China Datang Corporation, a State-owned
enterprise established under the laws of the PRC
and the controlling Shareholder of the Company;
as at the date of this announcement, CDC,
together with its subsidiaries, own
approximately 34.71% of the issued share capital
of the Company
"Chemical Materials" chemical materials to be purchased by Keqi
Coal-based Gas Company and Duolun Coal Chemical
Company for production activities from Energy
and Chemical Marketing Company under the
Procurement Contract of Chemical Products (Keqi)
and the Sale and Purchase Contract of Chemical
Products (Duolun), including liquid ammonia,
diisopropyl ether, sodium hydroxide, ethanol-
propylene and etc.
"Chemical Products" chemical products to be manufactured and sold to
Energy and Chemical Marketing Company by Keqi
Coal-based Gas Company and Duolun Coal Chemical
Company under the Sale and Purchase Contract of
Chemical Products (Keqi) and the Sale and
Purchase Contract of Chemical Products (Duolun),
including coal tar, mixed benzene,
polypropylene, propylene, ethanol, LPG, BTX
aromatics and etc.
"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 Hong Kong Stock
Exchange and the London Stock Exchange and whose
A Shares are listed on the Shanghai Stock
Exchange
"connected person(s)" has the meaning ascribed to it under the Listing
Rules
"connected transaction(s)" has the meaning ascribed to it under the Listing
Rules
"Directors" the director(s) of the Company
"Duolun Coal Chemical Datang Inner Mongolia Duolun
Company" Coal Chemical Company Limited, a subsidiary of
the Company, details of which are set out in the
section headed "Information of Parties to
Agreements"
"Energy and Chemical Datang Energy and Chemical
Marketing Company" Marketing Company Limited, a wholly-owned
subsidiary of the Company, details of which are
set out in the section headed "Information of
Parties to Agreements"
"Framework Agreement of the framework agreement of sale of natural gas
Sale of Natural Gas" entered into between Energy and Chemical
Marketing Company and Keqi Coal-based Gas
Company on 25 April 2014
"General Meeting" the general meeting of the Company to be held
for the consideration and approval of, amongst
others, the Framework Agreement of Sale of
Natural Gas, the Sale and Purchase Contract of
Chemical Products (Keqi) and the Sale and
Purchase Contract of Chemical Products (Duolun)
"H Share(s)" the overseas listed foreign shares of the
Company with a nominal value of RMB1.00 each,
which are listed on the Stock Exchange of Hong
Kong and the London Stock Exchange
"Hong Kong" the Hong Kong Special Administrative Region of
the PRC
"Keqi Coal-based Gas Inner Mongolia Datang
Company" International Keshiketeng Coal-based Gas Company
Limited, a subsidiary of the Company, details of
which are set out in the section headed
"Information of Parties to Agreements"
"Listing Rules" the Rules Governing the Listing of Securities on
the Stock Exchange
"PRC" the People's Republic of China
"Procurement Contract of the Procurement Contract of Chemical Products
Chemical Products (Keqi)" entered into between Energy and Chemical
Marketing Company and Keqi Coal-based Gas
Company on 25 April 2014
"Sale and Purchase the Framework Agreement of Sale of Natural Gas,
Agreement of Chemical the Sale and Purchase Contract of Chemical
Products and Materials" Products (Keqi), the Procurement Contract of
Chemical Products (Keqi) and the Sale and
Purchase Contract of Chemical Products (Duolun)
"Sale and Purchase the Sale and Purchase Contract of Chemical
Contract of Products entered into between Energy and
Chemical Products Chemical Marketing Company and Duolun Coal
(Duolun)" Chemical Company on 25 April 2014
"Sale and Purchase the Sale and Purchase Contract of Chemical
Contract of Products entered into between Energy and
Chemical Products Chemical Marketing Company and Keqi Coal-based
(Keqi)" Gas Company on 25 April 2014
"Sale and Purchase the sale and purchase agreement of coal-based
Agreement of Coal-based gas (energy and chemical - PetroChina) entered
Gas (Energy and Chemical - into between Energy and Chemical Marketing
PetroChina)" Company and PetroChina Company Limited on 10
December 2013, details of which are set out in
the relevant announcement issued by the Company
on 10 December 2013
"RMB" Renminbi, the lawful currency of the PRC
"Shareholder(s)" the holder(s) of Share(s) of the Company
"Shares" the issued ordinary shares of the Company with a
nominal value of RMB1.00 each, comprising
domestic Shares and H Shares
"Stock Exchange" The Stock Exchange of Hong Kong Limited
"%" Percent
By Order of the Board
Zhou Gang
Secretary to the Board
Beijing, the PRC, 25 April 2014
As at the date of this announcement, the Directors of the Company are:
Chen Jinhang, Hu Shengmu, Wu Jing, Fang Qinghai, Zhou Gang,
Li Gengsheng, Cao Xin, Cai Shuwen, Liu Haixia, Guan Tiangang,
Dong Heyi*, Ye Yansheng*, Li Hengyuan*, Zhao Jie*, JiangGuohua*
* Independent non-executive Directors
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