Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as 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 contents of this announcement. China Resources Power Holdings Company Limited (Incorporated in Hong Kong with limited liability under the Companies Ordinance) (Stock Code : 836) (Incorporated in the Cayman Islands with limited liability) (Stock Code: 1313) JOINT ANNOUNCEMENT Continuing Connected Transactions - Supply of Coal On 9 April 2010, CR Power Logistics, a non-wholly owned subsidiary of CR Power, has entered into the Master Coal Supply Agreement with CR Cement Investments, a wholly-owned subsidiary of CR Cement. Pursuant to the Master Coal Supply Agreement, CR Power Logistics has agreed to supply coal to CR Cement Investments (on behalf of certain subsidiaries of CR Cement which are engaged in the production of clinker in the PRC) on a continuing basis for a term from 9 April 2010 to 31 December 2012. CR Power Logistics is a non-wholly owned subsidiary of CR Power. CR Cement Investments is a wholly-owned subsidiary of CR Cement. CR Power and CR Cement are owned as to 64.45% and 73.34% by CRH, respectively. CRH is therefore the controlling shareholder of CR Power and CR Cement. As fellow subsidiaries, CR Power and CR Cement is a connected person of each other under the Listing Rules. Based on the applicable percentage ratios, the transactions contemplated under the Master Coal Supply Agreement constitute continuing connected transactions of each of CR Power and CR Cement, which are subject to reporting, announcement and independent shareholders approval requirements under the Listing Rules. 1
The transactions contemplated under the Master Coal Supply Agreement and the annual caps in relation thereto will be considered and, if thought fit, approved by the respective independent shareholders of CR Power and CR Cement at an extraordinary general meeting to be convened by CR Power and an extraordinary general meeting to be convened by CR Cement, respectively. A circular containing information including (i) details of the transactions under the Master Coal Supply Agreement and the annual caps in relation thereto, (ii) a letter of advice from the respective independent financial advisers to be appointed by CR Power and CR Cement, to advise the respective independent board committee and independent shareholders of CR Power and CR Cement in respect of the transactions contemplated under the Master Coal Supply Agreement and the annual caps in relation thereto, (iii) a letter of recommendation from the respective independent board committee of CR Power and CR Cement in respect of transactions contemplated under the Master Coal Supply Agreement and the annual caps in relation thereto, and (iv) a notice convening the respective extraordinary general meeting of CR Power and CR Cement, will be sent to the respective shareholders of CR Power and CR Cement as soon as practicable. A. MASTER COAL SUPPLY AGREEMENT On 9 April 2010, CR Power Logistics, a non-wholly owned subsidiary of CR Power, has entered into the Master Coal Supply Agreement with CR Cement Investments, a wholly-owned subsidiary of CR Cement. Pursuant to the Master Coal Supply Agreement, CR Power Logistics has agreed to supply coal to CR Cement Investments (on behalf of Certain CR Cement Subsidiaries) on a continuing basis for a term from 9 April 2010 to 31 December 2012. Date 9 April 2010 Parties (a) CR Power Logistics (as supplier); and (b) CR Cement Investments (as purchaser) (on behalf of Certain CR Cement Subsidiaries) Period The Master Coal Supply Agreement shall be effective from 9 April 2010 to 31 December 2012. 2
Subject Matter CR Power Logistics has agreed to supply, and CR Cement Investments has agreed to purchase, on a continuing basis, an aggregate of 1 million tonnes, 3 million tonnes and 4 millions tonnes of coal (subject to a 20% increase or decrease in line with the actual demand) for the three periods: (1) from 9 April 2010 to 31 December 2010; (2) from 1 January 2011 to 31 December 2011; and (3) from 1 January 2012 to 31 December 2012, respectively. Consideration and payment method Under the Master Coal Supply Agreement, the specification, quantity and unit price of the coal are to be agreed by the parties each time when a monthly sale and purchase order is being placed, on or before the 15th day of each month. The unit price of coal will be negotiated on an arm s length basis between CR Cement Investments and CR Power Logistics based on the prevailing market prices for coal. Payment for the supply of coal shall be settled monthly on or before 8th day of the following month. Annual Caps and Basis of Determination The estimated aggregate annual caps for the supply of coal under the Master Coal Supply Agreement for each of the three periods: (1) from 9 April 2010 to 31 December 2010; (2) from 1 January 2011 to 31 December 2011; and (3) from 1 January 2012 to 31 December 2012 are RMB 1,200 million, RMB 4,320 million and RMB 6,912 million equivalent to approximately HK$1,364 million, HK$4,909 million and HK$7,855 million, respectively. The annual caps under the Master Coal Supply Agreement are estimated based on the estimated supply of coal by CR Power Logistics to CR Cement Investments for each of the three periods: (1) from 9 April 2010 to 31 December 2010; (2) from 1 January 2011 to 31 December 2011; and (3) from 1 January 2012 to 31 December 2012, the prevailing market prices for coal and the predicted trend of coal prices in 2011 and 2012 in the PRC. B. REASONS FOR AND BENEFITS OF THE TRANSACTIONS Coal is primarily used as fuel in the production of clinker in the PRC by Certain CR Cement Subsidiaries. 3
In order to ensure stable coal supply for Certain CR Cement Subsidiaries in the production of clinker in the PRC, CR Cement Investments entered into the Master Coal Supply Agreement with CR Power Logistics. The directors of CR Power believe that the transactions contemplated under the Master Coal Supply Agreement will enable CR Power Group to fully utilise the extensive logistics network of CR Power Logistics. The directors of CR Cement believe that the transactions contemplated under the Master Coal Supply Agreement will enable CR Cement Group to benefit from the bulk purchase power offered by the extensive logistics network of CR Power Logistics. The directors of CR Power and CR Cement (excluding the independent non-executive directors of CR Power and CR Cement who will provide their opinions based on the advices from their respective independent financial advisers) believe, respectively, that (i) the transactions contemplated under the Master Coal Supply Agreement will be entered into on normal commercial terms in the ordinary and usual course of business of CR Power Group and CR Cement Group, respectively; and (ii) the terms of such transactions are fair and reasonable and in the best interests of CR Power and CR Cement and their shareholders as a whole, respectively. C. LISTING RULES IMPLICATIONS CR Power Logistics is a non-wholly owned subsidiary of CR Power. CR Cement Investments is a wholly-owned subsidiary of CR Cement. CR Power and CR Cement are owned as to 64.45% and 73.34% by CRH, respectively. CRH is therefore the controlling shareholder of the CR Power and CR Cement. As fellow subsidiaries, CR Power and CR Cement is a connected person of each other under the Listing Rules. Based on the applicable percentage ratios, transactions under the Master Coal Supply Agreement constitute continuing connected transactions of each of CR Power and CR Cement, which are subject to reporting, announcement and independent shareholders approval requirements under the Listing Rules. Each of CR Power and CR Cement will establish the independent board committee to advise their respective independent shareholders in respect of the Master Coal Supply Agreement and the annual caps in relation thereto. Independent financial advisers will be appointed by CR Power and CR Cement to advise their respective independent board committee and independent shareholders on the Master Coal Supply Agreement and the annual caps in relation thereto. 4
D. EXTRAORDINARY GENERAL MEETINGS The transactions contemplated under the Master Coal Supply Agreement and the annual caps in relation thereto will be considered and, if thought fit, approved by the respective independent shareholders of CR Power and CR Cement at an extraordinary general meeting to be convened by CR Power and an extraordinary general meeting to be convened by CR Cement, respectively. CRH and all its associates will abstain from voting at the respective extraordinary general meetings of CR Power and CR Cement in respect of the Master Coal Supply Agreement and the annual caps in relation thereto. A circular containing information including (i) details of the transactions contemplated under the Master Coal Supply Agreement and the annual caps in relation thereto, (ii) a letter of advice from the respective independent financial advisers to be appointed by CR Power and CR Cement, to advise the respective independent board committee and independent shareholders of CR Power and CR Cement in respect of the transactions under the Master Coal Supply Agreement and the annual caps in relation thereto, (iii) a letter of recommendation from the respective independent board committee of CR Power and CR Cement in respect of transactions contemplated under the Master Coal Supply Agreement and the annual caps in relation thereto, and (iv) a notice convening the respective extraordinary general meeting of CR Power and CR Cement, will be sent to the respective shareholders of CR Power and CR Cement as soon as practicable. E. FURTHER INFORMATION ON THE PARTIES CR Power is engaged in the investment, development, operation and management of power plants in the PRC. CR Power Logistics is principally engaged in loading, unloading and other port services, domestic freight transportation agency services, vessel leasing services, economic information consultancy services, coal wholesale, goods and technology import and export business. CR Cement is engaged in the production and sale of cement, clinker and concrete in Hong Kong and the PRC. CR Cement Investments is an investment holding company established in the PRC and its subsidiaries are engaged in the production and sale of cement, clinker and concrete in the PRC. F. DEFINITIONS In this announcement, the following expressions have the meanings set out below unless the context indicates otherwise. 5
associate Certain CR Cement Subsidiaries connected person has the meaning ascribed to it under the Listing Rules; means the subsidiaries of CR Cement which are engaged in the production of clinker in the PRC; has the meaning ascribed to it under the Listing Rules; CR Cement China Resources Cement Holdings Limited, a limited liability company incorporated in the Cayman Islands, the shares of which are listed and traded on the Main Board of the Stock Exchange; CR Cement Group CR Cement Investments CR Cement and its subsidiaries; China Resources Cement Investments Limited, a limited liability company established in the PRC and a wholly-owned subsidiary of CR Cement; CR Power China Resources Power Holdings Company Limited, a company incorporated in Hong Kong, the shares of which are listed and traded on the Main Board of the Stock Exchange; CR Power Group CR Power and its subsidiaries; CR Power Logistics (China Resources Power Logistics (Tianjin) Company Limited*), a limited liability company established in the PRC and a non-wholly owned subsidiary of CR Power; CRH HK$ Hong Kong China Resources (Holdings) Company Limited, a limited liability company incorporated in Hong Kong and a controlling shareholder of both CR Power and CR Cement; Hong Kong dollars, the lawful currency of Hong Kong; the Hong Kong Special Administrative Region of the PRC; * For identification only 6
Listing Rules Master Coal Supply Agreement PRC RMB Stock Exchange the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited; the master purchase agreement dated 9 April 2010 entered into between CR Power Logistics (as the supplier) and CR Cement Investments (as the purchaser) (on behalf of Certain CR Cement Subsidiaries) for the supply of coal; the People s Republic of China (for the purpose of this announcement, excluding Hong Kong and Macau Special Administrative Region); Renminbi, the lawful currency of the PRC; and The Stock Exchange of Hong Kong Limited. For the purpose of this announcement, translations of RMB into HK$ are made for illustration purposes only at the exchange rate of HK$1.00 to RMB0.88. By order of the Board CHINA RESOURCES POWER HOLDINGS COMPANY LIMITED SONG Lin Chairman By order of the Board CHINA RESOURCES CEMENT HOLDINGS LIMITED ZHOU Junqing Chairman Hong Kong, 9 April 2010 As at the date of this announcement, the executive directors of China Resources Power Holdings Company Limited are Mr. SONG Lin, Mr. WANG Shuai Ting, Mr. TANG Cheng, Mr. ZHANG Shen Wen and Ms. WANG Xiao Bin; the non-executive directors are Mr. JIANG Wei and Ms. CHEN Xiao Ying; and the independent non-executive directors are Mr. Anthony H. ADAMS, Mr. WU Jing Ru, Mr. CHEN Ji Min and Mr. MA Chiu-Cheung, Andrew. As at the date of this announcement, the executive directors of China Resources Cement Holdings Limited are Madam ZHOU Junqing, Mr. ZHOU Longshan and Mr. LAU Chung Kwok Robert; the non-executive directors are Mr. LI Fuzuo, Mr. DU Wenmin and Mr. WEI Bin; and the independent non-executive directors are Mr. IP Shu Kwan, Stephen, Madam ZENG Xuemin and Mr. LAM Chi Yuen. 7