China Power (HKG:2380)
Hong Kong, June 9, 2009 AEST (ABN Newswire) - China Power International Development Limited ("China Power" or the "Company") (HKG:2380)(PINK:CPWIF) is pleased to announce its acquisition of 63% of equity interest in Wu Ling Power from China Power International Holding Limited (hereafter referred to as "CPI Holding", a wholly-owned subsidiary of China Power Investment Corporation, the ultimate controlling shareholder of the Company) at a consideration of RMB4,465,087,500 (subject to adjustment). The consideration of Acquisition is to be satisfied as to 70% thereof or RMB3,125,561,250 (subject to adjustment) by the issue of Consideration Shares of HK$2.408 each, while the remaining 30% thereof or RMB1,339,526,250 (subject to adjustment) will be settled by way of cash payment.
The acquisition was arrived at after length negotiations between the Company and CPI Holding, and based on various relevant factors including the market environment, operating conditions, profitability of Wu Ling Power and asset valuation carried out by an individual valuation firm. The board of directors is of the view that the terms of the acquisition are fair and reasonable, on normal commercial terms and in the interest of the Company and its shareholders as a whole.
The Chairman of the Board of directors of China Power, Ms Li Xiaolin, commented, "The Acquisition is crucial to the Company. Upon completion of the Acquisition, the Company shall become the 'cleanest' overseas-listed independent power producer with the highest portion of hydropower in the PRC. Meanwhile, the attributable installed capacity of the Company upon completion will immediately surge by approximately 25% by virtue of the size of the Acquisition. Enormous potentials and sharp competitive edges of the hydropower business are expected as we see supportive measures by the State policy. Good expertise in hydropower development and operation of Wu Ling Power will also help our development of clean energy. Moreover, the Acquisition will boost the market presence of the Company in the central region of China remarkably, in particular in Hunan Province, achieving a more balanced and favourable fuel mix by integrating our thermal and hydro power business.
Upon the completion of the Acquisition, the Company's attributable installed capacity will increase by approximately 2,245MW to 11,282MW from approximately 9,037MW as at 31 December 2008, representing an approximately 25% increase. Furthermore, the Acquisition presents a significant expansion potential to the Company. Currently, Wu Ling Group has 3 hydropower projects under construction with a total attributable capacity of approximately 1,504MW which are expected to be consecutively commissioned from 2009 onwards.
The Acquisition of 63% interest in Wu Ling Power will transform the Company from a predominantly coal-fired power generation company to a power generation company with a more balanced fuel mix and a more balanced asset portfolio. Following the Acquisition, the consolidated hydropower capacity will account for approximately 32% of the total consolidated capacity of the Company, the attributable hydropower capacity will account for approximately 19% of the total attributable capacity of the Company, which will greatly lessen the Company's reliance on coal.
At present, the Chinese government is actively promoting the development of clean energy and hydropower is by far China's most prevalent and most well-established type of clean energy. By the end of 2008, the total installed hydropower capacity in China was approximately 172GW. According to the plan of the National Development and Reform Commission, the capacity will reach 300GW in 2020. Currently, hydropower has been supported by various governments' policies, including priority in dispatch and preferential taxation policies.
Wu Ling Power is the largest independent hydropower producer in Hunan, with assets located in two adjacent provinces, Hunan and Guizhou. The total hydropower installed capacity of Wu Ling Power accounted for approximately 40% of Hunan's hydropower installed capacity as at 31 December 2008, thereby playing a pivotal role in Hunan's power market.
Contact
China Power International Development Limited
Investor Relations
Mr. Shou Rufeng / Ms. Zhao Huan
Tel: (852) 2802-3861
Fax: (852) 2802-3922
Wonderful Sky Financial Group Limited
Mr. Terence Wong
E-mail: terencewong@wsfg.hk
Mr. Ivan Kau
E-mail: ivankau@wsfg.hk
Ms. Gigi Chan
E-mail: gigichan@wsfg.hk
Tel: (852) 2851-1038
Fax: (852) 2815-1352
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