On 28 Sept 2008, the State-owned Assets Supervision and Administration Commission of Shijiazhuang City (SASAC) signed an agreement with China Power Investment Corp. (CPI), the company's largest shareholder, to transfer its 100% stake in Shijiazhuang Dongfang Thermal Power Group Co., Ltd. (DTP) to CPI without consideration. Upon validation of the agreement, the company's effective controller will change to CPI.

The SASAC will strongly support the development of CPI's thermal power business as well as other businesses in the Shijiazhuang area and has committed to list two 600,000 kWh units in the Liangcun Phase II project, two 300,000 kWh units in Beijing or two 600,000 kWh units and the thermal power project in Xinji City into the major development plans of Shijiazhuang City. The SASAC will ensure that CPI has priority for the construction and development on the aforementioned projects.

CPI has committed to invest at least RMB 5 bln in the Shijiazhuang area by the end of 2009 and at least RMB 20 bln by the end of 2013, on condition that the related thermal power projects are approved by relevant authorities.

As the company plans to comply with the government's project to construct new higher output units while closing down smaller ones by the end of 2010, the SASAC also committed to redirect compensations for the disposal of certain land belonging to the company and its subsidiaries, while CPI has pledged to support the company with the implementation of the aforementioned projects.

The company will benefit from CPI's technological expertise and management experience for its short-term production and long-term development goals


Source: Securities Times

Date: 7 Oct 2008

CN01/NW/DM/BT/KM