CHINA SHENHUA ENERGY COMPANY LIMITED Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the content of this announcement, make no representation 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 content of this announcement.
(a joint stock limited company incorporated in the People's Republic of China with limited liability)
(Stock Code: 01088)As disclosed in the announcement dated 22 March 2013, and the circular dated 9 April 2013, the Company has entered into the Current Mutual Coal Supply Agreement with Shenhua Group Co on 22 March 2013 to provide for the mutual supply of coal between the Group and the Shenhua Group, the term of which will expire on 31 December 2016.
The Company has entered into a new Mutual Coal Supply Agreement with Shenhua Group Co on 24 March 2016. Pursuant to the Mutual Coal Supply Agreement, the Group has agreed to supply coal to the Shenhua Group and the Shenhua Group has agreed to supply coal to the Group. The Mutual Coal Supply Agreement will be effective from 1 January 2017.
Shenhua Group Co holds 73.06% interest in the Company, and is the controlling shareholder of the Company. As such, Shenhua Group Co is a connected person of the Company under the Hong Kong Listing Rules, and the Mutual Coal Supply Agreement and the transactions contemplated thereunder constitute continuing connected transactions of the Company pursuant to Chapter 14A of the Hong Kong Listing Rules.
In respect of the proposed annual caps under the Mutual Coal Supply Agreement, as one or more of the applicable percentage ratios exceeds 5% as calculated in accordance with Rule 14.07 of the Hong Kong Listing Rules, the Mutual Coal Supply Agreement and the transactions contemplated thereunder are subject to reporting, announcement and independent shareholders' approval requirements under Chapter 14A of the Hong Kong Listing Rules.
The Company will seek approval from the Independent Shareholders for the Mutual Coal Supply Agreement and the proposed annual caps thereto at a general meeting to be convened. According to the Hong Kong Listing Rules, Shenhua Group Co and their respective associates shall abstain from voting in respect of the resolutions for the Mutual Coal Supply Agreement and the proposed annual caps thereto.
The Company and the Independent Board Committee have reviewed the Mutual Coal Supply Agreement and the proposed annual caps thereto. The Company has appointed GF Capital (Hong Kong) Limited as the Independent Financial Adviser to make recommendations to the Independent Board Committee and the Independent Shareholders as to whether the terms, proposed annual caps of and the transactions contemplated under the Mutual Coal Supply Agreement are fair and reasonable, on normal commercial terms or better and in the ordinary and usual course of business of the Group, and are in the interests of the Company and its shareholders as a whole, and to advise the Independent Shareholders on how to vote.
A circular containing, among other things, further details regarding the continuing connected transactions under the Mutual Coal Supply Agreement, a letter from the Independent Board Committee and an opinion of the Independent Financial Adviser will be dispatched to the Shareholders in due course, in any event, no later than 6 May 2016.
The Company is a world-leading coal-based integrated energy company. The main business of the Company and its subsidiaries includes production and sales of coal and power, railway, port and ship transportation, and coal-to-olefins and other coal related chemical processing business.
Shenhua Group Co and its subsidiaries are principally engaged in the coal liquefaction, coal based chemical processing business, coal production and power generation business as well as investment and finance activities. Shenhua Group Co is the controlling shareholder of the Company. As at the date hereof, Shenhua Group Co holds 73.06% interest in the Company.
As disclosed in the announcement dated 22 March 2013, and the circular dated 9 April 2013, the Company has entered into the Current Mutual Coal Supply Agreement with Shenhua Group Co on 22 March 2013 to provide for the mutual supply of coal between the Group and the Shenhua Group, the term of which will expire on 31 December 2016.
The Company has entered into a new Mutual Coal Supply Agreement with Shenhua Group Co on 24 March 2016. Pursuant to the Mutual Coal Supply Agreement, the Group has agreed to supply coal to the Shenhua Group and the Shenhua Group has agreed to supply coal to the Group. The Mutual Coal Supply Agreement will be effective from 1 January 2017.
MUTUAL COAL SUPPLY AGREEMENT24 March 2016
The Company and Shenhua Group Co
Pursuant to the Mutual Coal Supply Agreement:
the Group has agreed to supply coal to the Shenhua Group; and
the Shenhua Group has agreed to supply coal to the Group.
The Mutual Coal Supply Agreement is conditional on the Company's compliance of all announcement, shareholders' approval and other requirements under the Shanghai Listing Rules and the Hong Kong Listing Rules in respect of the Mutual Coal Supply Agreement and is effective from 1 January 2017 and will expire on 31 December 2019.
The supply price under the Mutual Coal Supply Agreement is the result of unit price RMB/tonne multiplied by actual weight. The unit price of coal shall be determined by both parties after arm's length negotiations with reference to the market price and conditions and the following factors, and the transaction terms shall not be less favourable than those provided by third parties:
the national industrial policy as well as industry and market conditions in the PRC;
the specified guidelines issued by NDRC setting out the coal purchase prices (if any);
the current transacted coal prices of the local coal exchange or market in the PRC, i.e., the coal price with comparable quality that is offered to or offered by third parties under normal market conditions and normal commercial terms in the same or nearby regions. For local spot coal price, reference is made to (i) the spot price index of the local coal exchange or market in Bohai-rim region or nearby provinces as published on the website of 中國煤炭市場網 (www.cctd.com.cn) organised by 中國煤炭運銷協會 (China Coal Transportation & Sale Society) in the PRC as determined by both parties at arm's length negotiation; (ii) the sale price of local large coal enterprises as published by each coal website (if any); and/or (iii) price quotation of one or more other enterprises with comparable quality, quantity and place (if any). If price quotation from other enterprises is obtained, the Company will definitely go for the most favourable price obtained;
the quality of the coal (including the estimated calorific value of coal as required by different coal-fired power generating units);
the quantity of coal; and
the transportation fees.
The Company proposes that the annual caps of the Mutual Coal Supply Agreement for the years ending 31 December 2017, 31 December 2018 and 31 December 2019, respectively, be set as follows. The Company also sets out below the historical transaction amounts under the same categories for the years ended 31 December 2014 and 31 December 2015 and the period from 1 January 2016 to 31 January 2016.
The aggregate transaction amounts under the Current Mutual Coal Supply Agreement are within the existing annual caps.
CSEC - China Shenhua Energy Company Ltd. issued this content on 24 March 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 25 March 2016 02:45:24 UTC
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