BEIJING, Oct. 14, 2016 /PRNewswire/ -- Huaneng Power International, Inc. ("HPI" or the "Company") (NYSE: HNP; HKEx: 902; SSE: 600011) today announced that the Company and China Huaneng Group ("Huaneng Group") has entered into (i) a transfer agreement concerning the transfer of certain equity interests in certain companies (the "Transfer Agreement"), and (ii) a profit compensation agreement (the "Profit Compensation Agreement").
Subject to the satisfaction of the terms and conditions of the Transfer Agreement and the Profit Compensation Agreement, upon consummation of the transactions contemplated thereunder, HPI will acquire from Huaneng Group: (i) 80% equity interests in the registered capital of Huaneng Shandong Power Generation Co., Ltd. (the "Shandong Power Interests"); (ii) 100% equity interests in the registered capital of Huaneng Jilin Power Generation Co., Ltd. (the "Jilin Power Interests"); (iii) 100% equity interests in the registered capital of Huaneng Heilongjiang Power Generation Co., Ltd. (the "Heilongjiang Power Interests") and (iv) 90% equity interests in the registered capital of Huaneng Henan Zhongyuan Gas Turbine Power Co., Ltd. (the "Zhongyuan CCGT Interests", together with Shandong Power Interests, Jilin Power Interests and Heilongjiang Power Interests, the "Target Interests"). The Company will acquire the Target Interests at a price of RMB 15,113,825,800. The Company will pay the consideration in each transaction with its own funds.
The companies which equity interests are being acquired currently engage in the investment, construction or operation of various types of power generating facilities, the development of conventional and renewable energy, and various related engineering and technical support services. After the completion of the transactions, HPI will increase its total operational installed capacity by 15,937 MW, equity-based operational installed capacity by 13,389 MW and capacity under construction by 3,666 MW. The transaction will allow HPI to further expand its business and increase its market share. In addition, this is the first time for the Company to enter into Jilin and Heilongjiang power market.
The Company's Board of Directors has approved the transactions at a meeting on October 14, 2016, and the Company entered into the Transfer Agreement and the Profit Compensation Agreement on the same day.
Huaneng Group is the ultimate controlling shareholder of HPI. As of October 14, 2016, Huaneng Group holds a 75% direct interest and a 25% indirect interest in Huaneng International Power Development Corporation ("HIPDC"), while HIPDC, being the biggest direct controlling shareholder of HPI, holds 33.33% interest in HPI. Additionally, Huaneng Group also holds, in HPI, a 10.23% direct interests, a 3.11% indirect interests through China Huaneng Hong Kong Company Limited, a wholly-owned subsidiary of Huaneng Group, and a 0.49% indirect interests through China Huaneng Finance Corporation Ltd., a company controlled by Huaneng Group. HPI has been strictly separate from both Huaneng Group in terms of assets and financial matters, and the transactions will not cause any change to such status.
The independent directors of the Company, including Li Zhensheng, Yue Heng, Geng Jianxin, Xia Qing and Xu Mengzhou, have considered the transactions and issued independent opinion that the transactions are fair and will not impair the Company's or its minority shareholders' interests.
The transactions are subject to the approval by the Company's shareholders. Huaneng and its affiliates having interests in the transactions will abstain from voting at the extraordinary general meeting.
Additional Information about the Transaction
The Company will file with the Securities and Exchange Commission (the "SEC") a Current Report on Form 6-K regarding the transaction. All parties desiring details regarding the transaction are urged to review these documents, which are available at the SEC's website (http://www.sec.gov).
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About Huaneng Power International, Inc.
Huaneng Power International, Inc. is one of China's largest listed power producers with controlled generation capacity of 82,571 MW and equity-based generation capacity of 75,403 MW. The power plants of the Company are located in 22 provinces, municipalities and autonomous regions in China. The Company also has a wholly-owned power company in Singapore.
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Huaneng Power International, Inc.
Ms. MENG Jing / Ms. ZHAO Lin
Tel: (86 10) 6608 6765 / 6322 6596
Fax: (86 10) 6322 6888
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SOURCE Huaneng Power International, Inc.