ASIA POWER CORPORATION LIMITED 
By PROPOSED ACQUISITION OF 40% OF THE EQUITY INTEREST IN THE REGISTERED CAPITAL OF XI'AN KAIXIN ENTERPRISE CO., LTD
1. THE PROPOSED ACQUISITION
1.1 The Board of Directors of Asia Power Corporation Limited (the "Company" and together with its subsidiaries, the "Group") is pleased to announce that Asia Power (Hainan) Investment Co., Ltd ( ) ("AP Hainan") has today (the "Signing Date") entered into an equity transfer agreement (the "Equity Transfer Agreement") with Hainan Yabang Investment Management Co., Ltd ( ) ("Yabang"), pursuant to which AP Hainan has agreed to acquire 40% of the equity interest in the registered capital of Xi'an Kaixin Enterprise Co., Ltd ( ) ("Kaixin") from Yabang (the "Proposed Acquisition").
1.2 The Company currently holds: (a) 40% of the equity
interest in Kaixin through Fu Da Xin Holdings Ltd, its
wholly-owned subsidiary, and (b) 20% of the equity interest
in Kaixin through AP Hainan. The present shareholding of the
Company's interest in Kaixin is as follows:
The Company
100%
100%
Fu Da Xin
Holdings Ltd AP Hainan
40%
20%
Kaixin
1.3 The Group is undertaking the Proposed Acquisition as it
is expected that the Proposed Acquisition will improve the
Group's profitability in the long term. Upon completion of
the Proposed Acquisition, the Company's interest in
Kaixin will increase from 60% to 100%, and Kaixin will become
an indirect wholly-owned subsidiary of the Company.
1.4 Under the Equity Transfer Agreement, AP Hainan and Yabang
agreed that with effect from the Signing Date, AP Hainan
shall be entitled to all rights, and subject to all
obligations (including any economic and legal obligations),
arising from the 40% equity interest in Kaixin to be acquired
by AP Hainan pursuant to the Proposed Acquisition.
1.5 In the Company's announcement of 18 May 2010
relating to the Company's acquisition of an additional
effective equity interest of 52% in the registered capital of
Kaixin, it was disclosed that Addyson Xue and his associates
indirectly held an aggregate equity interest of 61.67% in the
registered capital of Yangpu Fudaxin Co., Ltd ( )
("Yangpu"), which in turn held 99.0% of the equity
interest in the registered capital of Yabang. Addyson Xue is
the sibling of Xue Liang, the Company's present
Executive Chairman.
However, as Yangpu had disposed of its equity interest in
Yabang on 30 March 2011, as of the Signing Date, Yabang is an
independent third party with no connections, relationships or
associations with any of the directors or substantial
shareholders of the Company.
1.6 This Announcement is made pursuant to Rule 704(17)(d) of
the Listing Manual. Rule 1006 of the Listing Manual is not
applicable in respect of Proposed Acquisition as the Proposed
Acquisition is deemed to be in the ordinary course of the
Company's business.
2. CONSIDERATION AND VALUE
2.1 The consideration for the Proposed Acquisition of RMB45
million (approximately S$8.9 million based on an illustrative
exchange rate of S$1.00 to RMB5.07 (the "Exchange
Rate")) (the "Consideration") was arrived at
on a willing buyer-willing seller basis after taking into
account the latest audited carrying amount of the net
tangible assets of the 40% equity interest in Kaixin as at 31
December 2011.
2.2 Under the Equity Transfer Agreement, the Consideration
shall be paid in cash in two tranches as follows:
(a) RMB22.5 million within five working days from the Signing
Date; and
(b) the remaining RMB22.5 within five working days from the
date that procedures with the relevant authorities in the
People's Republic of China to effect the transfer of the
40% equity interest in Kaixin from Yabang to AP Hainan has
been completed.
2.3 Based on the audited financial statements of the Group
for the financial year ended 31
December 2011 and the unaudited financial statements of the
Group for the six months ended
30 June 2012, the book value and net tangible asset value of
the 40% equity interest in Kaixin amounts to approximately
RMB47.9 million (approximately S$9.4 million based on the
Exchange Rate) and approximately RMB45.6 million
(approximately S$9.0 million based on the Exchange Rate) as
at 31 December 2011 and 30 June 2012, respectively.
3. FINANCIAL EFFECTS
Based on the audited financial statements for the financial
year ended 31 December 2011, assuming that the Proposed
Acquisition had been completed on 1 January 2011, the
earnings per share of the Group will increase from 2.19 RMB
cents to 2.95 RMB cents. The Proposed Acquisition is not
expected to have any material effect on the net tangible
assets per share of the Group for the financial year ending
31 December 2012.
4. DOCUMENT FOR INSPECTION
A copy of the Equity Transfer Agreement is available for
inspection during normal business hours at the registered
office of the Company at 24 Raffles Place, #27-03 Clifford
Centre, Singapore 048621 for a period of three (3) months
from the date of this Announcement.
By Order of the Board
Tian Aimin
Executive Director and Chief Executive Officer
30 August 2012
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