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DATANG INTERNATIONAL POWER GENERATION CO., LTD. (a sino-foreign joint stock limited company incorporated in the People's Republic of China) (Stock Code: 991) ANNOUNCEMENT NON-PUBLIC ISSUE OF A SHARES AND CONNECTED TRANSACTION
Non-public Issue of A Shares
The Board is pleased to announce that the proposal relating to the issue of A Shares by way of non-public issue was approved by the Board on 25 May 2010, pursuant to which the Company will issue up to a maximum of 1,000,000,000 A Shares to not more than 10 qualified investors at the issue price of not less than RMB6.81 (approximately equivalent to HK$7.74) per A Share.
The Subscription Agreement
The Board is pleased to announce that on 25 May 2010, the Company and CDC entered into the Subscription Agreement which will be effective subject to certain conditions. Pursuant to the Subscription Agreement, CDC proposed to subscribe in cash at the price of not less than RMB6.81 per Share for 10% (i.e. approximately 100,000,000 A Shares) of the ultimate total number of A Shares to be issued by way of non-public issue. The total consideration will be approximately RMB681 million. The subscription price to be offered by CDC will be the same as the subscription price payable by other investors in the current non-public issue of A Shares.
Connected Transaction
As at the date of the announcement, CDC and its subsidiaries hold a total of approximately 35.08% of the issued share capital of the Company. Accordingly, CDC is a Connected Person of the Company under Chapter 14 of the Listing Rules and the entering into of the Subscription Agreement constitutes a connected transaction of the Company under Chapter 14A of the Listing Rules.
As each of the applicable percentage ratios (as defined in Rule 14.07 of the Listing Rules) of the Subscription Agreement is more than 0.1% but less than 2.5%, the transaction contemplated under the Subscription Agreement is only subject to the reporting and announcement requirements under Rules 14A.45 to 14A.47 of the Listing Rules and does not require the approval by the independent Shareholders of the Company under Chapter 14A of the Listing Rules.
I. NON-PUBLIC ISSUE OF A SHARES
The proposal relating to the issue of A Shares by way of non-public issue was approved by the Board on 25 May 2010, pursuant to which the Company will issue up to a maximum of 1,000,000,000 A Shares by way of non-public issue to not more than 10 qualified investors.
1. The proposal of non-public issuance of A Shares
(1) Type of Shares to be issued and par value
The type of shares to be currently issued is domestic listed RMB-denominated ordinary Shares (A Shares) with a par value of RMB1.00 per Share.
(2) Method and time of issue
All Shares under the current issue shall be issued to specific targets by means of non-public issue. Shares shall be issued to specific targets at any suitable time chosen by the Company within six months upon the approval by the CSRC.
(3) Target subscribers and subscription method
The target subscribers under the current non-public issue shall not be more than ten specific investors, including CDC. Except for CDC, the Board and the lead underwriter shall determine other specific investors by way of price consultation according to the relevant provisions of the CSRC after obtaining the approval document from the CSRC. All target subscribers shall subscribe for the Shares under the current issue by way of cash.
(4) Number of shares to be issued
The number of A Shares to be issued in the current non-public issue shall not be more than one billion Shares (inclusive of one billion Shares). In the event of any trading of Shares on ex-right or ex-dividend basis from the date of the announcement on the resolutions of the Board, i.e., 26 May 2010, to the issue date, the number of A Shares to be issued under the current non-public issue shall be adjusted accordingly.
(5) Issue price and method of pricing
The issue price of the current non-public issue of A Shares shall not be lower than 90% of the average trading prices of the Company's A Shares (i.e., RMB6.81 per Share) for the 20 trading days immediately preceding the date of the announcement on the resolutions of the Board i.e., 26 May 2010. The final issue price shall be determined on a best available price basis with reference to the subscription quotations of the target subscribers after obtaining the approval documents for the issue. CDC shall not participate in the process of the market price consultation regarding the pricing of the current issue, but undertakes that it will accept the result of the price consultation and shall subscribe for the Shares at the same price as other investors.
(6) Arrangement for the lock-up period
The A Shares to be subscribed by CDC under the current non-public issue shall not be transferred within 36 months commencing from the date of the completion of the issue. The A shares to be subscribed by other target subscribers under the current non-public offering shall not be transferred within 12 months commencing from the date of the completion of the issue.
(7) Place of listing
The Shares under the current issue shall be listed and traded on the Shanghai Stock Exchange after expiry of the lock-up period.
2. Conditions of the non-public issue of A Shares
Completion of the non-public issue of A Shares is subject to, among others, (i) the approval by the Shareholders at the AGM on the authorisation to the Board to deal with the relevant matters relating to the non-public issue of A Shares at the Board's discretion; (ii) the approval by the Shareholders at the AGM on the relevant resolutions relating to the proposal on the non-public issue of A Shares and other relevant resolutions relating to the non-public issue of A Shares, including the proposed use of the fundraising proceeds; and (iii) the obtaining of all necessary consents, approvals and authorisation from relevant government authorities (including but not limited to the approval by the CSRC).
As CDC is a party to the Subscription Agreement and will participate in the current non-public issue of A Shares, CDC shall abstain from voting at the AGM to approve the "Resolution for Non-public Issue of A Shares".
3. Use of fundraising proceeds
It is estimated that the proposed net proceeds from the current non-public issue of A Shares (inclusive of the subscription of A Shares to be made by CDC under the Subscription Agreement) shall not exceed RMB8 billion and the Company plans to invest such proceeds in the following projects:
No. Project to be funded by the fundraising Total investment Proceeds to be proceeds of the project invested (RMB billion) (RMB billion) 1 Inner Mongolia Datang International Keqi 25.710 2.000 Coal-based Natural Gas Project (with daily production of 12 million N cubic metres) 2 Liaoning Datang International Fuxin 24.570 1.814 Coal-based Natural Gas Project (with daily production of 12 million N cubic metres) 3 Phase 1 at the Fujian Ningde Nuclear 49.342 1.223 Power Project 4 Chongqing Wujiang Yinpan Hydropower 8.045 0.600 Station 5 Liaoning Datang International Fuxin 0.483 0.097 Qianchatai Windpower Project 6 Liaoning Datang International Fuxin 0.480 0.096 Houchatai Windpower Project 7 Inner Mongolia Datang International 0.448 0.094 Chayouhouqi Hongmu Windpower Mill Phase 2 Project 8 Phase 1 of East Unit 2 open-cut coal 2.965 0.376 mine project located in Shengli Coal Mine 9 Repayment of bank loans - 1.700 Total - 8.000
In the event that the Company have already carried out the investment in certain relevant projects by using bank loans and internal resources prior to obtaining the proceeds, the proceeds from the fundraising shall be used for repaying the relevant bank loans and replenishing the Company's working capital after obtaining the proceeds. In the event that the actual net proceeds from the fundraising under the current issue are not sufficient for fulfilling the capital required for the projects, the insufficient portion will be satisfied by the Company's internally generated funds. In the event that the actual net proceeds under the current issue exceed the capitals required for the projects, the excess portion shall be used to replenish the Company's working capital.
The proposed non-public issue of A Shares is expected to be made under a general mandate to be granted to the Board in the AGM in accordance with Rules 13.36(2)(b) and 19A.38 of the Listing Rules (for details of the general mandate, please refer to notice of AGM dated 26 April 2010).
II. THE SUBSCRIPTION AGREEMENT
The Company and CDC entered into the Subscription Agreement on 25 May 2010 which will be effective subject to certain conditions. Pursuant to the Subscription Agreement, CDC proposed to subscribe in cash at the price of not less than RMB6.81 per Share for 10% (i.e. approximately 100,000,000 A Shares) of the ultimate total number of A Shares with nominal value of RMB1.00 per Share to be issued by way of non-public issue. The total consideration will be approximately RMB681 million. The subscription price to be offered by CDC will be the same as the subscription price for other investors in the current non-public issue of A Shares.
Date25 May 2010Parties: 1. the Company; and 2. CDC
Principal Terms of the Subscription Agreement
1. The Company proposed to issue not more than 1,000,000,000 A Shares (ordinary shares with nominal value of RMB1.00 per Share) by way of non-public issue to not more than 10 target investors, including CDC.
2. Subscription target and size: CDC proposed to subscribe in cash for 10% of the ultimate total number of A Shares to be issued, i.e. approximately 100,000,000 A Shares. In the event of any trading of Shares on ex-right or ex-dividend basis from the date of the announcement on the resolutions of the Board, i.e., 26 May 2010, to the date of the issue, the subscription price of the A Shares to be subscribed by CDC under the current non-public issue shall be adjusted accordingly.
3. Subscription price and pricing method: The subscription price to be paid by CDC for the subscription of each of the A Shares under the current non-public issue will be equal to the issue price of each of the A Shares under the current non-public issue (i.e. the subscription price payable by other target investors), i.e., not less than RMB6.81 (approximately equivalent to HK$7.74) per A Share, which shall not be lower than 90% of the average trading prices of the Company's A Shares (i.e., RMB7.57 per share) for the 20 trading days immediately preceding the date of the announcement on the resolutions of the Board (i.e. 26 May 2010). The final issue price shall be determined on a best available price basis with reference to the subscription quotations of the target subscribers after obtaining the approval documents for the issue. CDC will not participate in the price quoting process for this issuance. The minimum issue price for the non-public issue of the A Shares will be adjusted accordingly if any ex-right or ex-dividend events in respect of the shares of the Company occur during the period from the date of the announcement on the resolutions of the Board (i.e., 26 May 2010) to the date of the issue.
4. Lock-up period: The Shares to be subscribed by CDC under the non-public issue shall not be transferred within thirty six (36) months from the completion date of the issue.
5. Subscription method: CDC will subscribe for the Shares by way of cash.
6. Payment method of subscription amount: As at the date of the settlement, CDC will transfer the subscription amount to the account for the current non-public issue of A Shares specifically opened by the sponsor of the current non-public issue of A Shares.
7. Conditions: The Subscription Agreement is conditional upon, including but
not limited to, the completion of the following conditions:
1. The approval of the non-public issuance of A Shares by the Shareholders at
the general meeting of the Company.
2. The approval of the non-public issue of A Shares given by the State-owned
Assets Supervision and Administration Commission of the State Council.
3. The approval of the non-public issue of A Shares given by the Office of
General Manager of the CDC.
4. The approval of the current non-public issue of A Shares by the CSRC.
Information on the Group and CDC
The Group is principally engaged in the construction and operation of power plants, the sale of electricity and thermal power, the repair and maintenance of power equipment and power related technical services, with its main service areas being in the PRC.
CDC is a state-owned enterprise. Its scope of operations includes the development, investment, construction, operation and management of power energy; organisation of power (thermal) production and sales; as well as power technology development and consultation.
Connected Transaction
The A Shares to be subscribed by CDC under the current non-public issue of A Shares is expected to be made under a general mandate to be granted to the Board in the AGM in accordance with Rules 13.36(2)(b) and 19A.38 of the Listing Rules (For details of the general mandate, please refer to notice of AGM dated 26 April 2010).
As at the date of the announcement, CDC and its subsidiaries hold a total of approximately 35.08% of the issued share capital of the Company. Accordingly, CDC is a Connected Person of the Company under Chapter 14 of the Listing Rules and the entering of the Subscription Agreement constitutes a connected transaction of the Company under Chapter 14A of the Listing Rules.
As each of the applicable percentage ratios (as defined in Rule 14.07 of the Listing Rules) of the Subscription Agreement is more than 0.1% but less than 2.5%, the transaction contemplated under the Subscription Agreement is only subject to the reporting and announcement requirements under Rules 14A.45 to 14A.47 of the Listing Rules and does not require the approval by the independent Shareholders of the Company under Chapter 14A of the Listing Rules.
Reasons for and Benefits of the Non-Public Issue of A Shares and the Subscription Agreement
In recent years, under the strategic direction of "Focus in Power Generation, Pursue Synergistic Diversifications", the Company has been increasing investments in projects such as coal-fired power, hydropower, wind power and nuclear power as well as power-related upstream and downstream businesses such as coal mining, coal chemical and railway projects in order to meet the Company's increasingly growing business needs. The non-public issue of A Shares will leverage the resource allocation function of the capital market, capture favourable market opportunities, enrich the Company's capital funds, expand the Company's production capacity and core competitiveness, and improve the Company's capital structure.
The entering into of the Subscription Agreement also represents CDC's strong confidence in, and support to, the future developments of the Company.
The Directors, including independent non-executive Directors, are of the view that the terms of the CDC Subscription Agreement are normal commercial terms, fair and reasonable and in the interest of the Company and its Shareholders as a whole.
III. FUND RAISING ACTIVITIES IN THE PAST 12 MONTHS
Save for the capital raising activities mentioned below, there has not been anyother capital raising activity of the Company in the 12 months preceding thedate of this announcement:Date of Event Approximate Intended use Actual use of announcement net proceeds of proceeds proceeds as at the date of this announcement 24 March, 2010 530,000,000 RMB3,248,246,600 The As at the date of A Shares fundraising the announcement, were issued proceeds were the fundraising to specific primarily proceeds have been targets by used in the used up in way of construction accordance with non-public of power the fundraising issue generation proceeds usage projects. plan. For details, please refer to the "Previous Fundraising Proceeds Usage Report and the Verification Report" published on the websites of the Shanghai Stock Exchange ( www.sse.com.cn) and the Stock Exchange (www.hkex.com.hk) on 26 May 2010.
IV. THE STRUCTURE OF THE SHAREHOLDING OF THE COMPANY
The shareholding structures of the Company immediately before and after the current non-public issue of 1,000,000,000 A Shares will be as follows:
Immediately before the completion of Immediately after the completion of the non-public issue of A Shares of the non-public issue of A Shares of the Company the Company
Name of Number of Percentage Percentage Number of Percentage Percentage Shareholder Shares held of total of total Shares held of total of total
issued A issued issued A issued Shares of share Shares of share the capital of the capital of Company(%) the Company(%) the Company(%) Company(%) CDC A Shares: 44.02 32.17 A Shares: 40.62 30.50 3,959,241,160 4,059,241,160 H Shares: Not 2.91 H Shares: Not 2.69 358,680,000 Applicable 358,680,000 Applicable
Other 5,035,118,840 55.98 40.90 5,035,118,840 50.38 37.83 Shareholders
holding A Shares
Other 2,956,997,578 Not 24.02 2,956,997,578 Not 22.22 Shareholders
Applicable Applicable holding H Shares
Other target Not Applicable Not Not 900,000,000 9.00 6.76 investors
Applicable Applicable (excluding CDC)
Total: 12,310,037,578 100 100 13,310,037,578 100 100
DEFINITIONS
In this announcement, unless the context otherwise requires, the following expressions have the following meanings:
"AGM" the 2009 annual general meeting to be convened by the Company at the function room of 5/F, Intercontinental Hotel, No. 11 Financial Street, Xicheng District, Beijing, the PRC on 11 June 2010 (Friday) at 9:00 a.m. "A Share(s)" the domestic ordinary share(s) of the Company with a nominal value of RMB1.00 per share and are listed on the Shanghai Stock Exchange "Board" the board of Directors "CDC" China Datang Corporation, a State-owned enterprise established under the laws of the PRC and is a controlling shareholder of the Company pursuant to the Listing Rules. CDC and its subsidiaries own approximately 35.08% of the issued share capital of the Company as at the date of this announcement "Company" Datang International Power Generation Co., Ltd., a sino-foreign joint stock limited company incorporated in the PRC on 13 December 1994, whose H Shares are listed on the Stock Exchange and the London Stock Exchange and whose A Shares are listed on the Shanghai Stock Exchange "Connected Person" has the meaning ascribed to it under the Listing Rules "CSRC" the China Securities Regulatory Commission "Director(s)" the director(s) of the Company "Domestic Shares" the ordinary shares issued by the Company with a nominal value of RMB1.00 each, which are subscribed for or credited as paid up in Renminbi "Group" the Company and its subsidiaries "HK$" Hong Kong dollar(s), the lawful currency of Hong Kong "Hong Kong" the Hong Kong Special Administrative Region of the PRC "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 and the London Stock Exchange "Listing Rules" The Rules Governing the Listing of Securities on the Stock Exchange "PRC" the People's Republic of China "RMB" Renminbi, the lawful currency of the PRC "Shares" the ordinary shares of the Company with a nominal value of RMB1.00 each, comprising domestic Shares and H Shares "Shareholder(s)" the holder(s) of the Share(s) "Stock Exchange" The Stock Exchange of Hong Kong Limited "Subscription the subscription agreement dated 25 May 2010 Agreement" entered into between the Company and CDC relating to the subscription by CDC of A Shares to be issued by way of non-public issue by the Company "%" per cent Note: Unless otherwise specified and for reference only, the conversion of HongKong dollars into Renminbi is based on the exchange rate of HK$1= RMB0.877 inthis announcement By Order of the Board Zhou Gang Secretary to the Board
Beijing, the PRC, 25 May 2010
As at the date of this announcement, the Directors of the Company are:
Zhai Ruoyu, Hu Shengmu, Cao Jingshan, Fang Qinghai, Zhou Gang, Liu Haixia, Guan Tiangang, Su Tiegang, Ye Yonghui, Li Gengsheng, Xie Songlin*, Liu Chaoan*, Yu Changchun*, Xia Qing* and Li Hengyuan*.
*Independent non-executive Directors
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