July 26, 2010 (Chinavestor - Press Release) The New A Share Issue (Original Proposal) and the New H Share Issue (Original Proposal) were approved at the 8th Meeting of the Sixth Session of the Board on 15 January 2010 and the 2010 First Extraordinary General Meeting, the 2010 First Class Meeting for Holders of A Shares and the 2010 First Class Meeting for Holders of H Shares on 16 March 2010, respectively. Due to the changes in the market environment, the Huaneng Power Int. (NYSE:HNP) has decided to proceed with the revision to the New A Share Issue (Original Proposal) and the New H Share Issue (Original Proposal) (comprising mainly the adjustments to the lowest subscription price for the new A Shares, the subscription price for the new H Shares and the maximum number of shares to be issued out of the New Issue (Revised Proposal)).
Pursuant to the New Issue (Revised Proposal), Huaneng Power Int. (NYSE:HNP) would issue not exceeding 1,500 million new A Shares by way of placement to not more than 10 designated investors including Huaneng Group. If the total shares issued under the New A Share Issue (Revised Proposal) amounts to 1,500 million shares, 500 million new A Shares shall be issued to Huaneng Group, with the remaining 1,000 million new A Shares to be issued to other designated investors. If for whatever reason the total shares to be issued out of the valid subscription of the New A Share Issue (Revised Proposal) to other designated investors are less than 1,000 million shares, then the number of A Shares to be issued to Huaneng Group shall correspondingly be adjusted on a pro rata basis. Concurrently, if the total shares issued under the New A Share Issue (Revised Proposal) amounts to 1,500 million shares, then the Company shall issue 500 million new H Shares to Hua Neng HK. If the total shares issued under the New A Share Issue (Revised Proposal) are less than 1,500 million, then the number of H Shares to be issued out of the New H Share Issue (Revised Proposal) will correspondingly be adjusted on a pro rata basis.
Pursuant to the Original A Shares Subscription Agreement and the Supplemental Agreement to the A Shares Subscription Agreement, the Company agreed to issue to Huaneng Group and Huaneng Group agreed to subscribe for 500 million new A Shares of the Company. If for whatever reason the total shares to be issued out of the valid subscription of the New A Share Issue (Revised Proposal) to other designated investors are less than 1,000 million shares, then the number of A Shares to be issued to Huaneng Group shall correspondingly be adjusted on a pro rata basis. Based on the subscription price per new A Share of not less than RMB5.57 and on the assumption that Huaneng Group shall subscribe for 500 million new A Shares, the consideration in aggregate will be not less than RMB2,785 million.
Pursuant to the Original H Shares Subscription Agreement and the Supplemental Agreement to the H Shares Subscription Agreement, the Company agreed to issue to Hua Neng HK and Hua Neng HK agreed to subscribe for 500 million new H Shares of the Company while in any event the issuing size shall not exceed the number as approved by the CSRC. If the ultimate total shares to be issued out of the New A Share Issue (Revised Proposal) are less than 1,500 million shares, then the number of H Shares to be issued to Hua Neng HK shall correspondingly be adjusted on a pro rata basis. Based on the subscription price of HK$4.73 per new H Share and on the assumption that Hua Neng HK shall subscribe for 500 million new H Shares, the consideration in aggregate shall be HK$2,365 million (approximately RMB2,064 million).
In accordance with the Articles of Association, the Hong Kong Listing Rules and applicable rules and regulations in the PRC, the New Issue (Revised Proposal) constitutes a variation of class rights of the holders of A Shares and the holders of H Shares. Therefore, the New Issue (Revised Proposal) is subject to approvals of Independent Shareholders by way of special resolutions at the general meeting and separate class meetings.
At present, Huaneng Group holds a 8.75% direct interest in the Company; HIPDC (Huaneng Group holds a 51.98% direct interest and 5% indirect interest in HIPDC) holds 42.03% of the total issued share capital of the Company. Hua Neng HK holds 0.17% interest in the Company. Therefore, Huaneng Group and Hua Neng HK are connected persons of the Company under the Hong Kong Listing Rules. As the transactions between the Company and each of Huaneng Group and Hua Neng HK as contemplated by the New Issue Connected Transactions constitute connected transactions of the Company, the New Issue Connected Transactions are subject to reporting, announcement and Independent Shareholders’ approval requirements under the Hong Kong Listing Rules.
The Company will convene an EGM and Class Meetings on 10 September 2010 for the purpose of seeking the approvals from Independent Shareholders for the New Issue (Revised Proposal) and the New Issue Connected Transactions (including the Subscription Agreements). According to the Hong Kong Listing Rules, Huaneng Group, Hua Neng HK and their respective associates will abstain from voting in respect of the resolutions relating to the adjustments to the New Issue Connected Transactions at the EGM and the Class Meeting. On obtaining the approvals to the New Issue (Revised Proposal) at the EGM and the Class Meetings, the New Issue (Revised Proposal) shall supersede the New Issue (Original Proposal) passed at the 2010 First Extraordinary General Meeting, the 2010 First Class Meeting for Holders of A Shares and the 2010 First Class Meeting for Holders of H Shares.
Huaneng Power Int. (NYSE:HNP) and the Independent Board Committee have reviewed the New Issue (Revised Proposal) and the New Issue Connected Transactions. The Company will appoint an independent financial adviser to make recommendations to the Independent Board Committee and the Independent Shareholders as to whether the terms of the New Issue (Revised Proposal) and the New Issue Connected Transactions are fair and reasonable and whether the New Issue (Revised Proposal) and the New Issue Connected Transactions are in the interests of the Company and its shareholders as a whole, and to advise the Independent Shareholders on how to vote. The notices of the EGM and H Share Class Meeting are issued on 27 July 2010. Circular giving further information relevant to the New Issue (Revised Proposal) and the New Issue Connected Transactions and containing the advice of the independent financial adviser, and the recommendations from the Independent Directors are expected to be despatched to Shareholders on or before 16 August 2010.
The parties participating in the New A Share Issue (Revised Proposal) will consist of not more than 10 designated investors including Huaneng Group. Apart from Huaneng Group, the Company has not yet entered into any agreement with any investors with respect to the New A Share Issue (Revised Proposal) . Accordingly, the identities of the other designated investors and the number of A Shares to be subscribed by them under the New A Share Issue (Revised Proposal) can only be ascertained when the Company has, pursuant to the rules prescribed by the CSRC, obtained the approvals for the New A Share Issue (Revised Proposal) and completed the bidding process. If, after ascertaining the identities of other designated investors under the New A Share Issue (Revised Proposal), it is known that such designated investor(s) is/are connected person(s) to the Company under the Hong Kong Listing Rules, the Company shall comply with the relevant requirements of information disclosure and (if required) obtaining of approval from Independent Shareholders as per the Hong Kong Listing Rules.
If you like us, spread the word to the fellow investors on your favorite Social Bookmarking websites
