Shanghai Huitong Energy Co. Ltd (600605) announced that the company had signed a contract with China Disabled Persons' Federation (CDPF) of Jing'an District, Shanghai. The company sold a land plot occupied by its industrial plant to the CDPF for RMB 15.08 mln. The deal will provide financial support for the company's wind power business.

As of the effective date of the contract, the net book value of the asset in question was RMB 0.717 mln. By cutting other costs, the company could reap a RMB 14 mln non-recurring gain from the deal. The property is located at No. 339, Xinfeng Rd, Jing'an District. It covers an area of 213.00 sq. m and its construction area is 815.00 sq. metres. The land was intended for industrial purposes and land transfer fees have been submitted. The company had mortgaged this land for a loan from the Industrial and Commercial Bank of China (ICBC).

According to the company, the CDPF paid RMB 9.416 mln on the day the contract was signed. Of this amount, RMB 5.38 mln was intended to repay the mortgage loans from ICBC, and RMB 4.036 mln was deposited to the company's designated account. CDPF of Jing'an District will pay the remaining RMB 5.6615 mln to the designated account of the company before 30 Jun 2008.

The company viewed the deal as an important step towards improving its liquidity in fulfilling its strategic transformation. The sale of idle assets will not only strengthen liquidity, but also provide capital support for its future development of wind power.

Source: China Securities Journal

Date: 10 Jun 2008

CN01/SW/AR/MM