Jul 16, 2015 - the Group with finance lease services subject to the terms and conditions provided therein. Huadian ... c
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華電國際電力股份有限公司 HUADIAN POWER INTERNATIONAL CORPORATION LIMITED* (A Sino-foreign investment joint stock company limited by shares incorporated in the PRC) (Stock code: 1071)
Continuing Connected Transaction Finance Lease Framework Agreement On 16 July 2015, the Company entered into the Finance Lease Framework Agreement with Huadian Financial Leasing, pursuant to which Huadian Financial Leasing has agreed to provide the Group with finance lease services subject to the terms and conditions provided therein. Huadian Financial Leasing is a subsidiary of the Company's controlling Shareholder, i.e., China Huadian, and thus a Connected Person of the Company. The transactions (i.e., the Finance Leases) under the Finance Lease Framework Agreement are being entered into on a continuing basis in the ordinary and usual course of business of the Group and accordingly constitute continuing connected transactions of the Company as defined under the Hong Kong Listing Rules. As the percentage ratios (as defined in Rule 14.07 of the Hong Kong Listing Rules) applicable to the Finance Leases by the Company under the Finance Lease Framework Agreement are expected to exceed 0.1% but to be less than 5%, pursuant to Rule 14A.76 of the Hong Kong Listing Rules, the transactions are exempt from the circular and Shareholders’ approval requirements under Chapter 14A of the Hong Kong Listing Rules. I.
Introduction
On 16 July 2015, the Company entered into the Finance Lease Framework Agreement with Huadian Financial Leasing, pursuant to which Huadian Financial Leasing has agreed to provide the Group with finance lease services subject to the terms and conditions provided therein. As at the date of this announcement, the Company has not entered into any finance lease agreement of a similar nature before. II.
Finance Lease Framework Agreement
1.
Date
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16 July 2015 2.
Parties
(i) The Company; and (ii) Huadian Financial Leasing 3.
Term
The term is, subject to signing of the Finance Lease Framework Agreement, from the date of approval at the 7th session of the Board (i.e., 30 March 2015) to the date of the next annual Board meeting which is currently anticipated to be a day around 30 March 2016. The Group has not entered into any finance lease with Huadian Financial Leasing during the period from 30 March 2015 to the date of the entering into the Finance Lease Framework Agreement. 4.
Finance lease services
Pursuant to the Finance Lease Framework Agreement, Huadian Financial Leasing will provide finance lease services to the Group as requested or instructed by the Company. These services include direct leasing and leaseback services. In respect of the leaseback service, Huadian Financial Leasing will purchase equipment from the Group, and such equipment will then be leased back to the Group. The Group will purchase the relevant equipment under each Finance Lease at a nominal consideration of RMB1 upon the expiry of the lease period of each Finance Lease. In respect of each Finance Lease, the relevant member(s) of the Group and Huadian Financial Leasing will enter into separate implementation contract(s). The terms of each implementation contract are in line with the terms of the Finance Lease Framework Agreement, and each implementation contract shall be subject to and conditional upon the Finance Lease Framework Agreement (or its renewal agreement) continuing to be in force. The aggregate finance amount outstanding from time to time in respect of all Finance Leases will not exceed RMB1 billion. This is determined on the basis of the anticipated need for financing of the Group and the capability of Huadian Financial Leasing to provide finance lease services. 5.
Finance lease cost
Pursuant to the Finance Lease Framework Agreement, the finance cost for the finance lease services provided by Huadian Financial Leasing will be determined at a rate which shall not be higher than the benchmark lending rate applicable to PRC banks for the same period and for the same term. Such finance cost will not be higher than the finance cost for comparable finance lease services available from other financial leasing companies in the PRC and will not be higher than the finance cost for similar finance lease services offered by Huadian Financial Leasing to other member companies of China Huadian. On this basis, the Directors (including the independent non-executive Directors) are of the view that the Finance Lease Framework Agreement is made on normal commercial terms, which are fair and reasonable and in the interests of the Company and the Shareholders as a whole. 2
III III.. Reasons for and benefits expected to accrue from the Finance Lease Framework Agreement The Finance Leases contemplated under the Finance Lease Framework Agreement are expected to optimize the Company's debt structure, reduce its finance costs, improve its capital utilization rate and thereby promote its business development. ial Leas ing and the Company IV. Information on Huadian Financ Financial Leasing 1.
al Lea sing Huadian Financi Financial Leasing
Huadian Financial Leasing is a financial leasing company established in Tianjin City in 2013 with approval by Tianjin Commission of Commerce in the PRC. As at the date of this announcement, the registered capital of Huadian Financial Leasing is RMB1.851 billion. As at 31 December 2014, the total assets and net assets of Huadian Financial Leasing amounted to RMB12.280 billion and RMB1.135 billion, respectively. The revenue generated from the major business of Huadian Financial Leasing for the year of 2014 amounted to RMB693 million, with net profit of RMB107 million. Pursuant to the Measures for the Administration of Foreign-funded Lease Industry (《外商投資租賃業管理辦法》), Huadian Financial Leasing may provide direct leasing, subleasing, leaseback, leveraged lease, trust lease, joint lease and different types of finance lease services to China Huadian and its member companies. Huadian Financial Leasing is a subsidiary of China Huadian, and its equity interest is held as to 80.01% by China Huadian as at the date of this announcement. 2.
The Company
The Company and its subsidiaries are principally engaged in the construction and operation of power plants, including large-scale efficient coal or gas-fired generating units and various renewable energy projects, and the development, construction and operation of coal mines. V. Hong Kong Listing Rules implications Huadian Financial Leasing is a subsidiary of the Company's controlling Shareholder, i.e., China Huadian, and thus a Connected Person of the Company. The transactions (i.e., the Finance Leases) under the Finance Lease Framework Agreement are being entered into on a continuing basis in the ordinary and usual course of business of the Group and accordingly constitute continuing connected transactions of the Company as defined under the Hong Kong Listing Rules. As the percentage ratios (as defined in Rule 14.07 of the Hong Kong Listing Rules) applicable to the Finance Leases by the Company under the Finance Lease Framework Agreement are expected to exceed 0.1% but to be less than 5%, pursuant to Rule 14A.76 of the Hong Kong Listing Rules, the transactions are exempt from the circular and Shareholders’ approval requirements under Chapter 14A of the Hong Kong Listing Rules. When the Board resolutions in respect of the Finance Leases were passed at the 7th meeting of the 7th session of the Board, four Directors, namely Mr. Li Qingkui, Mr. Chen Bin, Mr. Gou Wei and Mr. Chu Yu, held position with China Huadian at that time, and were therefore considered to have a material interest in the transaction and they had abstained from voting on the relevant Board resolutions.
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VI. Definitions In this announcement, unless the context states otherwise, the following expressions have the following meanings: ” “Board Board”
means the board of Directors;
” “China Huadian Huadian”
means 中國華電集團公司 China Huadian Corporation*, a wholly PRC State-owned enterprise and the controlling Shareholder of the Company;
” “Company Company”
means 華電國際電力股份有限公司 Huadian Power International Corporation Limited*, a Sino-foreign investment joint stock company limited by shares incorporated in the PRC, whose H shares and A shares are listed on The Stock Exchange of Hong Kong Limited and the Shanghai Stock Exchange, respectively;
“Connected ” Person(s) Person(s)”
has the meaning ascribed to such term in the Hong Kong Listing Rules that apply to the Company;
” “Directors Directors”
means the directors of the Company;
“Finance Lease Framework ” Agreement Agreement”
means the finance lease framework agreement dated 16 July 2015 entered into between the Company and Huadian Financing Leasing in respect of the Finance Leases;
” “Finance Leases Leases”
means the finance lease services provided by Huadian Financial Leasing to members of the Group pursuant to the Finance Lease Framework Agreement;
” “Group Group”
means the Company and its subsidiaries;
” “Hong Kong Kong”
means Hong Kong Special Administrative Region of the PRC;
“Hong Kong Listing Rules Rules””
means the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited;
“Huadian Leasing Leasing””
means 華電融資租賃有限公司 Huadian Financial Leasing Company Limited*, a subsidiary of China Huadian;
Financial
“PRC PRC””
means the People’s Republic of China;
“RMB RMB””
means Renminbi, the lawful currency of the PRC;
” “Shareholder(s) Shareholder(s)”
means the shareholder(s) of the Company;
“%”
means per cent.
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By order of the Board Huadian Power International Corporation Limited* Zhou Lianqing Secretary to the Board As at the date of this announcement, the Board comprises:
Li Qingkui (Chairman, Non-executive Director), Chen Jianhua (Vice Chairman, Non-executive Director), Wang Yingli (Vice Chairman, Non-executive Director), Chen Bin (Executive Director), Geng Yuanzhu (Executive Director), Gou Wei (Non-executive Director), Chu Yu (Non-executive Director), Zhang Ke (Non-executive Director), Ding Huiping (Independent Non-executive Director), Wang Dashu (Independent Non-executive Director), Wei Jian (Independent Non-executive Director) and Zong Wenlong (Independent Non-executive Director). Beijing, the PRC 16 July 2015
*For identification purposes only
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