CHINA POWER INTERNATIONAL DEVELOPMENT LIMITED 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.
China Power International Development Limited中 國 電 力 國 際 發 展 有 限 公 司
(incorporated in Hong Kong with limited liability)
(Stock Code: 2380) CONTINUING CONNECTED TRANSACTIONS Coal Supply Framework AgreementsThe Board announces that on 30 December 2016, the Company has entered into two Coal Supply Framework Agreements with Huainan Mining and Pingmei Shenma respectively in relation to the supply of coal to the Purchasers, subsidiaries of the Company.
Since Huainan Mining and Pingmei Shenma are both substantial shareholders of certain subsidiaries of the Company, they both are therefore connected persons of the Company at the subsidiary level under Chapter 14A of the Listing Rules. Accordingly, the transactions contemplated under the two Coal Supply Framework Agreements constitute continuing connected transactions of the Company under the Listing Rules.
For Huainan Mining Coal Supply Framework Agreement, the Proposed Annual Caps for the three financial years ending 31 December 2017, 2018 and 2019 will not exceed RMB7,596,000,000, RMB8,238,000,000 and RMB8,616,000,000 (equivalent to
approximately HK$8,440,000,000, HK$9,153,000,000 and HK$9,573,000,000) respectively.
For Pingmei Shenma Coal Supply Framework Agreement, the Proposed Annual Caps for the three financial years ending 31 December 2017, 2018 and 2019 will not exceed RMB2,798,000,000, RMB3,288,000,000 and RMB3,288,000,000 (equivalent to
approximately HK$3,109,000,000, HK$3,653,000,000 and HK$3,653,000,000) respectively.
As the Board has approved the transactions contemplated under both the Huainan Mining Coal Supply Framework Agreement and the Pingmei Shenma Coal Supply Framework Agreement, and the independent non-executive Directors have confirmed that the terms of the Framework Agreements are fair and reasonable and the transactions contemplated thereunder are on normal commercial terms and in the interests of the Company and its shareholders as a whole, given that Huainan Mining and Pingmei Shenma are connected persons at the subsidiary level only, the transactions contemplated under the Framework Agreements are subject to the announcement, reporting and annual review requirements but are exempt from the circular, independent financial advice and independent shareholders' approval requirements under Rule 14A.101 of the Listing Rules.
Reference is made to the announcement of the Company dated 6 December 2013 in relation to the coal supply framework agreement signed with Huainan Mining which will expire on 31 December 2016. On 30 December 2016, the Company has entered into the Huainan Mining Coal Supply Framework Agreement with Huainan Mining, pursuant to which it was agreed to continue the purchase and supply of coal between the parties for another term of three years upon the expiry of the original coal supply framework agreement.
On 30 December 2016, the Company has also entered into the Pingmei Shenma Coal Supply Framework Agreement with Pingmei Shenma, pursuant to which the parties agreed that Pingmei Shenma will supply coal to the Purchasers, subsidiaries of the Company for a term of three years.
HUAINAN MINING COAL SUPPLY FRAMEWORK AGREEMENT Date30 December 2016
PartiesThe Company (as the purchaser, representing its subsidiaries, collectively the "Purchasers"); and
Huainan Mining (as the supplier).
Pursuant to the Huainan Mining Coal Supply Framework Agreement, Huainan Mining will supply coal to the Purchasers. The term of the agreement is three years commencing from 1 January 2017 and ending 31 December 2019.
The parties agreed that the purchase price of coal shall be determined by both parties after arm's length negotiations with reference to (i) the current transacted coal prices of the local coal exchange or market in the PRC (two or more latest comparable transactions of independent third parties); (ii) the available data published at the website of 中國煤炭市場 網 (China Coal Market*) at www.cctd.com.cn; (iii) the quality of the coal (including the
estimated calorific value of coal as required by different coal-fired power generating units); and (iv) the quantity of coal.
The Purchasers will settle the purchase of coal from Huainan Mining on a monthly basis or such other payments terms as both parties will agree from time to time in contracts.
It has also been agreed that the parties thereto will from time to time determine the price, quality, quantity, delivery and transportation methods of the coal to be supplied by Huainan Mining to the Purchasers, and subject to the parties' discussion and negotiation at arm's length basis.
Historial AmountsThe historial amounts and the annual caps of the past transactions with Huainan Mining for the years ended 31 December 2014, 2015 and 2016 are set out below:
Historial amount (RMB) | Annual caps (RMB) | |
Year 2014 | 3,239,000,000 (actual) | 5,694,000,000 |
Year 2015 | 2,983,000,000 (actual) | 7,388,000,000 |
Year 2016 | 3,570,000,000 (expected) | 9,082,000,000 |
The Proposed Annual Caps were determined by both parties after arm's length negotiations with reference to the following factors:
the estimated amount of coal to be purchased from Huainan Mining based on the estimated amount of electricity to be generated by the current generating units and the expected generating units of the Purchasers that will commence commercial operation for each of the three financial years of 2017, 2018 and 2019;
the estimated increase in the demand for electricity based on the historical average growth rate in the past few years in China and the forecasts made by China Electricity Council; and
the status of excess supply over demand in the PRC coal market that led to a decline in market price of coal in the past few years has been reversing lately, the supply of coal in certain locations are becoming tight and thus the possible fluctuation in coal price should there be a substantial change in the coal market.
It was estimated that the Proposed Annual Caps for the three financial years ending 31 December 2017, 2018 and 2019 will not exceed RMB7,596,000,000, RMB8,238,000,000 and RMB8,616,000,000 (equivalent to approximately HK$8,440,000,000, HK$9,153,000,000 and HK$9,573,000,000) respectively.
PINGMEI SHENMA COAL SUPPLY FRAMEWORK AGREEMENT Date30 December 2016
PartiesThe Company (as the purchaser, representing its subsidiaries, collectively the "Purchasers"); and
Pingmei Shenma (as the supplier).
Pursuant to the Pingmei Shenma Coal Supply Framework Agreement, Pingmei Shenma will supply coal to the Purchasers. The term of the agreement is three years commencing from 1 January 2017 and ending 31 December 2019. Prior to the Pingmei Shenma Coal Supply Framework Agreement, the Company did not enter into any framework agreement with Pingmei Shenma before.
The parties agreed that the purchase price of coal shall be determined by both parties after arm's length negotiations with reference to (i) the current transacted coal prices of the local coal exchange or market in the PRC (two or more latest comparable transactions of independent third parties); (ii) the available data published at the website of 中國煤炭市場 網 (China Coal Market*) at www.cctd.com.cn; (iii) the quality of the coal (including the
estimated calorific value of coal as required by different coal-fired power generating units); and (iv) the quantity of coal.
The Purchasers will settle the purchase of coal from Pingmei Shenma on a monthly basis or such other payments terms as both parties will agree from time to time in contracts.
It has also been agreed that the parties thereto will from time to time determine the price, quality, quantity, delivery and transportation methods of the coal to be supplied by Pingmei Shenma to the Purchasers, and subject to the parties' discussion and negotiation at arm's length basis.
Proposed Annual CapsThe Proposed Annual Caps were determined by both parties after arm's length negotiations with reference to the following factors:
the estimated amount of coal to be purchased from Pingmei Shenma based on the estimated amount of electricity to be generated by the current generating units and the expected generating units of the Purchasers that will commence commercial operation for each of the three financial years of 2017, 2018 and 2019;
the estimated increase in the demand for electricity based on the historical average growth rate in the past few years in China and the forecasts made by China Electricity Council; and
China Power International Development Ltd. published this content on 30 December 2016 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 30 December 2016 04:27:06 UTC.
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