FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
PAGE 1 OF 16 PAGES
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
November, 2002
Huaneng Power International, Inc.
West Wing, Building C, Tianyin Mansion
No. 2C Fuxingmennan Street
Xicheng District
Beijing, 100031 PRC
This Form 6-K consists of:
A press announcement by Huaneng Power International, in English, of
ongoing connected transactions.
A press announcement by Huaneng Power International, in English, of
having entered into a management agreement with Huaneng Group and HIPDC.
The Stock Exchange of Hong Kong Limited takes no responsibility for the
contents of this announcement, makes no representation as to its accuracy
or completeness and expressly disclaims any liability whatsoever for any
loss howsoever arising from or in reliance upon the whole or any part of
the content of this announcement.
[GRAPHIC OMITTED] HUANENG POWER INTERNATIONAL, INC.
(A Sino-foreign joint stock limited company incorporated in the People's
Republic of China)
ON-GOING CONNECTED TRANSACTION
o On 6th November 2002, the Company entered into the Entrusted
Management Agreement with Huaneng Group and HIPDC, pursuant to
which the Company agreed to provide management services to Huaneng
Group and HIPDC for the Entrusted Power Plants. The estimated
total service fee per year is RMB50.6 million. The service fee was
determined on arm's length terms.
o As Huaneng Group and HIPDC are direct and indirect substantial
shareholders of the Company, the Transaction constitutes a
connected transaction for the Company under the Hong Kong Listing
Rules and the Shanghai Listing Rules.
o The Company will convene an EGM for the purposes of seeking the
approvals of Independent Shareholders for the Transaction
(including the Entrusted Management Agreement) under the Shanghai
Listing Rules. Huaneng Group and HIPDC and their respective
Associates will abstain from voting in respect of the resolution
relating to the Transaction.
o The Company expects that the notice of the EGM and the Circular
will be despatched to the shareholders of H shares within 21 days
from the date of this announcement.
Background
The Company currently operates 17 power plants in the PRC with a net
generation capacity of 13,895 MW.
The relationship between the Company, Huaneng Group and HIPDC is as follows:
|----------------|
| Huaneng Group |
|----------------|
|
| 51.98%
|
|----------------|
| HIPDC |
|----------------|
|
| 42.58%
|
|----------------|
| the Company |
|----------------|
Huaneng Group is an indirect controlling shareholder of the Company,
holding a 51.98% interest in HIPDC. As of the Latest Practicable Date,
HIPDC held 2,554,840,000 Domestic Shares in the Company, representing
42.58% of the total issued share capital (Domestic Shares and H Shares) of
the Company.
ENTRUSTED MANAGEMENT AGREEMENT
The Entrusted Management Agreement was approved by the Directors at the
board meeting held on 5th November 2002 and signed by Huaneng Group, HIPDC
and the Company on 6th November 2002.
Date of the Entrusted 6th November 2002
Management
Agreement:
Parties: Entrusting Party: Huaneng Group
HIPDC
Managing Party: The Company
Assets entrusted: (i) 17 Entrusted Power Plants currently managed
and power plants in the future controlled by
the Huaneng Group
(ii) 5 Entrusted Power Plants currently managed
and power plants in the future controlled by
HIPDC
Service rendered: Management service provided by the Company in
respect of the Entrusted Power Plants. The Entrusted
Management Agreement has a term of 5 years. Upon the
expiry of the Entrusted Management Agreement, unless
any party intends otherwise, it will continue to be
operational. The Entrusted Management Agreement may
also be terminated by, inter alia, (i) Huaneng Group
and/or HIPDC giving 30 days notice to the Company or
(ii) the Company giving 90 days notice to Huaneng
Group and/or HIPDC.
Service fee: The total management fee per year in respect of the
Entrusted Management is approximately RMB50.6 million.
If the aggregate Net Installed Capacity of the
Entrusted Power Plants exceeds 14,000 MW, the
monthly service fee payable by Huaneng Group and/or
HIPDC to the Company shall be adjusted as follows:
the aggregate of the actual
Net Installed Capacity
consigned under the Entrusted
the service fee payable Management for that month
for the previous month x -----------------------------
% the aggregate of the actual Net
Installed Capacity consigned under
the Entrusted Management for the
previous month
The service fee (excluding the incentive / penalty
element) is payable monthly by Huaneng Group and
HIPDC to the Company in arrears. The service fee in
respect of the Entrusted Management was determined
on the basis of normal commercial terms and arm's
length negotiation between the parties thereto with
reference to international practice.
Condition: The Entrusted Management Agreement is subject to the
Transaction (including the Entrusted Management
Agreement) being approved and adopted by the
Independent Shareholders.
RATIONALE FOR THE TRANSACTION AND PRICING FACTORS
The Company develops, constructs, operates and manages large thermal power
plants in China nationwide. It is the largest independent power producer in
China.
The Company is able to gain more management experience and improve its
management abilities through the management of the Entrusted Power Plants,
thereby minimizing competition with related parties. By reason of the
above, the Company will be able to further strengthen its leading position
in the power generation market of the PRC. At the same time of streamlining
the managemnt structure of the thermal power generation assets of the
Huaneng Group, it also paves the way for the further integration of the
power generation assets of the Huaneng Group.
The Entrusted Management would also enable the Company to obtain direct
knowledge in the development status of more power markets, thereby
exploring new development opportunities. The Entrusted Management will be
the main driving force of the Company's future development.
The service fee payable by Huaneng Group and HIPDC comprises the following
three components:
(i) costs (including set-up, operational and other recurrent items to be
incurred by the Company in managing the Entrusted Power Plants),
namely RMB46 million per annum;
(ii) a premium to cover estimation risks which represents 10% of the costs,
namely RMB4.6 million per annum; and
(iii) an incentive / penalty component which is calculated based on the
confirmed results and does not exceed 15% of the costs, namely either
an incentive or a penalty of not more than RMB6.9 million.
The total service fee will be adjusted annually by reference to the
inflation rate of the previous year as published by the State Statistic
Department and the salary component will be adjusted by the percentage
increase approved by the board of the Company. This methodology is
consistent with international practice and is equitable to the
shareholders.
INFORMATION REGARDING THE ENTRUSTED POWER PLANTS
(1) Entrusted Power Plants currently managed by Huaneng Group
Name of Date of Nature Registered Location
Entrusted Power establishment of entity Capital
Plant (RMB
thousands)
1 Huaneng Group 1st February 2001 State-owned Shandong Province
Xindian Power branch entity Zibo City
Plant
2 Huaneng Group 1st February 2001 State-owned Shandong Province
Baiyang River branch entity Zibo City
Power Plant
3 Yimin Huaneng 18th May 1995 Limited 583,900 Inter Mongolia
Dongdian Coal- Liability Autonomus Region
Fired Power Company Hulunbei - ermeng
Limited Liability
Company
4 Tianjin Huaneng 17th May 1996 Limited 300,000 Tianjin City
Yangliuqing Power Liability
Generation Limited Company
Liability Company
5 Jinggangshan 18th March 1996 Limited 529,850 Jiangxi Province
Huaneng Power Liability Jian City
Generation Limited Company
Liability Company
6 Daqing Huaneng 24th December Limited 110,000 Heilongjiang
Xinhua Power 1997 Liability Province Daqing
Generation Limited Company City
Liability Company
7 Shanxi Huaneng 29th November Limited 80,000 Shanxi Province
Yushe Power 1994 Liability Yushe County
Limited Liability Company
Company
8 Suzhou Huaneng 15th September Limited 20,000 Jiangsu Province
Termal Power 1997 Liability Suzhou City
Limited Company
Company
9 Henan Huaneng 26th December Limited 10,000 Henan Province
Qinbei Power 2001 Liability Jiyuan City
Generation Limited Company
Liability Company
10 Hubei Huaneng 4th January 1999 Limited 90,596 Hubei Province
Sujiawan Power Liability Wuhan City
Generation Limited Company
Liability Company
11 Changshan 25th August 1997 State-owned 60,000 Jilin Province
Huaneng Thermal Songyuan City
Power Plant
12 Wuhan Huazhong 13th September Company 650,000 Hubei Province
Huaneng Power 1996 Limited by Wuhan City
Generation Joint Shares
Stock Limited
Company
13 Guangdong Yuehwa 3rd December 1986 Limited 360,000 Guangdong
Power Generation Liability Province
Limited Liability Company Guangzhou City
Company
14 Inner Mongolia 12th May Company 944,980 Inner
Mendian Huaneng 1994 Limited by Mongolia
Thermal Power Shares Autonomous
Generation (Listed) Region
Company Limited Huhehaote
City
15 Liaoning Nenggang 31st August 1998 Sino-Foreign 716457.7 Liaoning Province
Power Plant Co-operation (actual Fushun City
Company Limited paid up
capital 477,890)
16 Haikou Thermal 20th October 1994 Company 540,510 Hainan Province
Power Generation Limited Haikou City
Company Limited by Shares
17 Hegang Power 24th February 1998 Limited 300,000 Heilongjiang
Generation Limited Liability Province Hegang
Liability Company Company City
(2) Entrusted Power Plants currently managed by HIPDC
Name of Date of Nature of Capital Location
Entrusted establishment entity (RMB
Power Plant thousands)
1 HIPDC 8th June 1985 Branch of Chongqing
Changing Sino-foreign City
Branch equity joint
Company venture
(Luohuang
Power Plant)
2 HIPDC 8th June 1985 Branch of Chongqing
Chongqing Sino-foreign City
Branch equity joint
Company venture
(Chongqin
CCGT)
3 HIPDC Yueyang 16th October Branch of Hunan
Branch 1996 Sino-foreign Province
Company equity joint Yueyang
venture
4 HIPDC Yingkou 27th February Branch of Liaoning
Branch 1988 Sino-foreign Province
Company equity joint Yingkou
venture
5 HIPDC Beijing 21st January Branch of Beijing
Branch 1991 Sino-foreign City
Company equity joint
(Beijing venture
Huaneng
Thermal Power
Plant)
[Chart Continued]
(1) Entrusted Power Plants currently managed by Huaneng Group
Name of Installed Percentage of other
Entrusted Power capacity ownership by shareholders
Plant (no. of units x MW) Huaneng Group
1 Huaneng Group 2 x 220 100%
Xindian Power 2 x 100
Plant
2 Huaneng Group 3 x 50 100%
Baiyang River
Power Plant
3 Yimin Huaneng 2 x 500 51% Liaoning Provincial
Dongdian Coal- Power Company,
Fired Power Heilongjiang
Limited Liability Provincial Power
Company Company and Jilin
Provincial Power
Company
4 Tianjin Huaneng 2 x 300 54.02% Tianjin Municipal
Yangliuqing Power 1 x 125 Jinneng Investment
Generation Limited 2 x 100 Company and
Liability Company Huabui Power
Development Company
5 Jinggangshan 2 x 300 60% Jiangxi Provincial
Huaneng Power Power Compnay
Generation Limited and Jiangxi
Liability Company Provincial
Investment
Company
6 Daqing Huaneng 1 x 200 70% Heilongjiang
Xinhua Power 2 x 100 Provincial Power
Generation Limited 2 x 50 Development
Liability Company Company
7 Shanxi Huaneng 2 x 100 50% Shanxi Provincial
Yushe Power Regional Power
Limited Liability Company and
Company Shanxi Provincial
Power Company
8 Suzhou Huaneng 1 x 6 53.45% Suzhou Municipal
Termal Power 1 x 3 Huqiu District
Limited State-owned
Company (Collective) Asset
Management
Company and Jiangsu Changjiang
Energy Saving
Industrial
Development
Company
9 Henan Huaneng 2 x 600 55.00% Henan Provincial
Qinbei Power Construction and
Generation Limited Investment Corporation
Liability Company Power company and
Henan Provincial
Jiyuan City
Construction and
Investment
Company
10 Hubei Huaneng 3 x100 53.25% Hubei Provincial
Sujiawan Power Power Company,
Generation Limited Hubei Yangxin
Liability Company Aluminium Plant,
E'Cheng Iron and
Steel Group Limited
Liability Company
11 Changshan 2 x 100 68.27% Jilin Provincial
Huaneng Thermal Energy and Transportation
Power Plant Corporation
12 Wuhan Huazhong 4 x 300 40% Central China
Huaneng Power (Note 1) Power Corporation
Generation Joint Wuhan Power
Stock Limited Development
Company Company, Central
China Power
Development
Company and
Wuhan Tianli
Property Company
13 Guangdong Yuehwa 2x300 4x125 49% Guangdong
Power Generation (Note 2) Provincial Yuedian
Limited Liability Asset Operation
Company Company Limited
14 Inner Mongolia 4x200 3x100 12.73% Inner Mongolia
Mendian Huaneng 5x50 Power (Group)
Thermal Power 3x25 Limited Liability
Generation Company, state-
Company Limited owned shares.
Listed RMB
domestic shares
15 Liaoning Nenggang 2 x 200 32.97% Liaoning Energy
Power Plant Corporation and
Company Limited Liaogang Power
Company Limited
Hainan Provincial
State-owned Assets
Administration
Bureau, Hainan
Foreign Economic
and Trade Bidding
Company and
Hainan Tianhe
Industrial Company
16 Haikou Thermal 2x125 1x100 15.55% Hainan Provincial
Power Generation Power Company,
Company Limited Zhongyin Group
Investment
Company Limited,
Haikou Gangao
Power Investment
Company, Huaneng
(Hainan) Joint
Stock Company.
Hainan Qiongshen
Property
Development
Company Limited.
Hainan Provincial
State-owned Assets
17 Hegang Power 2x300 13% Northern China
Generation Limited Power Corporation,
Liability Company Guohua Energy
Company Limited.
Heilongjiang
Provincial Power
Development
Company and
Heilongjiang
Provincial Power
Company
(2) Entrusted Power Plants currently managed by HIPDC
Name of Installed Percentage Other shareholders
Entrusted capacity of ownership
Power Plant (no. of by HIPDC
units x
MW)
1 HIPDC 4x360 (Note 3) (Note 4)
Changing
Branch
Company
(Luohuang
Power Plant)
2 HIPDC 2x36.75 (Note 3) (Note 4)
Chongqing 1x35.1
Branch
Company
(Chongqin
CCGT)
3 HIPDC Yueyang 2x362.5 (Note 3) (Note 4)
Branch
Company
4 HIPDC Yingkou 2x300 (Note 3) (Note 4)
Branch
Company
5 HIPDC Beijing 2x165 (Note 3) (Note 4)
Branch 2x220
Company
(Beijing
Huaneng
Thermal Power
Plant)
Note 1: Huaneng Group has the management right of such power plant
Note 2: The board of directors is controlled by Huaneng Group.
Note 3: The structure of the investment is subject to confirmation. However, HIPDC will have a interests in
them of more than 50%
Note 4: Beneficiaries nominated by the local governments.
CONNECTED TRANSACTION
As Huaneng Group and HIPDC are indirect and direct substantial shareholders
of the Company due to HIPDC's 42.58% ownership of the Company and Huaneng
Group's 51.98% ownership in HIPDC, under the Hong Kong Listing Rules,
Huaneng Group and HIPDC are connected persons to the Company. The
Transaction will constitute a connected transaction for the Company under
Rule 14.25(1) of the Hong Kong Listing Rules.
The estimated service fee payable in respect of the Transaction per annum
falls below the deminimus threshold of the higher of HK$10,000,000 or 3% of
the net tangible assets of the Company (and its subsidiaries) under Rule
14.25(1) of the Hong Kong Listing Rules.
Directors' opinion on the Transaction
The Directors (including the Independent Directors) consider that the
Transaction is and will be carried out in the Company's ordinary course of
business at arm's length basis, on normal commercial terms and is fair and
reasonable to the shareholders of the Company. The Directors believe that
the consideration under the Transaction is reasonable and is fair to both
the Company and all its shareholders. The Entrusted Management is in
accordance with the long term development strategy of the Company.
WAIVER TO BE SOUGHT
As the Directors consider that it would be impracticable for the Company to
comply strictly with the connected transactions requirements of the Hong
Kong Listing Rules on each occasion when the Transaction arises, the
Company will apply to the Hong Kong Stock Exchange for a waiver of the
Transaction from strict compliance with such requirements:
(a) the Transaction will be (i) in the ordinary and usual course of
business of the Company; and (ii) either on normal commercial terms,
or on terms no less favourable than those available to (or from)
independent third parties; or (iii) where there is no available
comparison for the purpose of determining whether (i) or (ii) is
satisfied, on terms that are fair and reasonable so far as the
shareholders of the Company are concerned;
(b) the aggregate value of the Transaction in each financial year will
not exceed 3% of the net tangible assets of the Company (as disclosed
in the Company's published consolidated accounts) during the latest
period:
(c) details of the Transaction as required by Rule 14.25(1)(A) to (D) of
the Hong Kong Listing Rules to be disclosed in the Company's next and
subsequent published annual reports;
(d) the Independent Directors shall review annually the Transaction and
confirm in the Company's annual report that the Transaction has been
conducted in the manner stated in condition (a) and (b) above; and
(e) the auditors of the Company shall review annually the Transaction,
and confirm to the board of Directors in writing (a copy of which
will be provided to the Stock Exchange) that the Transaction:
(i) received the approval of the Directors;
(ii) has been entered into at price levels consistent with the
pricing policies as stated in the relevant agreements;
(iii) has been entered into in accordance with the terms of the
agreement governing the Transaction; and
(iv) has not exceeded the caps as set out in condition (b) above;
and
Where, for whatever reason, the auditor declines to accept the engagement
or is unable to provide the letter, the Directors shall notify the Stock
Exchange immediately.
CONNECTED TRANSACTIONS UNDER SHANGHAI LISTING RULES
As the A shares of the Company are listed on the Shanghai Stock Exchange,
the Company is required, in addition to the Hong Kong Listing Rules, also
to comply with the Shanghai Listing Rules.
The Transaction will constitute a connected transaction under the Shanghai
Listing Rules, which shall be subject to the approval of the Company's
shareholders. The connected persons (as defined under the Shanghai Listing
Rules) shall abstain from voting on resolutions related to the
Transactions.
In accordance with Rule 7.3.11(9) of the Shanghai Listing Rules, the
Company has appointed Beijing H&J Vanguard Consulting Limited ("Hejun") as
the PRC independent financial advisor to the Independent Directors in
respect of the Transaction.
Details of Hejun's views regarding the Transaction will be set out in the
Circular to be dispatched by the Company in respect of the Transaction to
the shareholders.
The Independent Directors are of the view that (1) the board of Directors
has met the relevant requirements of the Shanghai Listing Rules and the
articles of association of the Company regarding approval of the relevant
resolutions of the Transaction; and (2) the Transaction arising therefrom
is fair to the Company's shareholders.
THE EGM
The Company will convene an EGM on 23rd December 2002 to consider the
approval of the Transaction (including the Entrusted Management Agreement).
Huaneng Group, HIPDC, and their respective Associates will abstain from
voting at the EGM in respect of the ordinary resolutions to approve the
Transaction (including the Entrusted Management Agreement). The Company
expects that the notice of the EGM and the Circular giving further
information on the Transaction (including the Entrusted Management
Agreement) will be despatched to shareholders of H shares within 21 days
from the date of this announcement.
DOCUMENTS FOR INSPECTION
The following documents are now available for inspection at the Company's
office:
1. Resolutions of the board of Directors and minutes signed by the
Directors;
2. Entrusted Management Agreement; and
3. Opinion of Beijing H&J Vanguard Consulting Limited (as the PRC
independent financial advisor).
DEFINITIONS
"Associate" the meaning ascribed to it in the Hong Kong Listing
Rules;
"Circular" the Circular to be despatched to its shareholders of H
shares by the Company in respect of the Transaction;
"Company" Huaneng Power International, Inc.;
"Directors" the directors of the Company;
"Entrusted the management of the Entrusted Power Plants entrusted by
Management" Huaneng Group and HIPDC to the Company pursuant to the
Entrusted Management Agreement;
"Entrusted the entrusted management agreement entered into among the
Management Company, Huaneng Group and HIPDC on 6th November 2002;
Agreement"
"Entrusted the power plants currently or in the future managed or
Power Plants" controlled by Huaneng Group or HIPDC, the management of
which will be entrusted to the Company in accordance with
the Entrusted Management Agreement;
"EGM" an extraordinary general meeting of the Company to be
held for shareholders of the Company to consider and
approve the Transaction;
"HIPDC" Huaneng International Power Development Corporation;
"Hong Kong the Rules Governing the Listing of Securities on the Hong
Listing Kong Stock Exchange;
Rules"
"Huaneng Group" China Huaneng Group;
"Independent the independent directors of the Company, who are invited
Directors" to advise the Independent Shareholders in connection with
the Transaction;
"Independent shareholders of the Company other than Huaneng Group,
Shareholders" HIPDC and their respective Associates;
"Latest 6th November 2002, being the latest practicable date
Practicable prior to the publication of this announcement for
Date" ascertaining certain information referred to in this
announcement;
"Net Installed the total of the installed capacity of controlled power
Capacity" plants (of which be calculated on 100% equity basis) and
uncontrolled power plants (of which be calculated on
owned equity basis);
"PRC" the People's Republic of China;
"RMB" the lawful currency of the PRC;
"Shanghai
Listing
Rules" The Listing Rules of Shanghai Stock Exchange
"Stock Exchange" The Stock Exchange of Hong Kong Limited; and
"Transaction" the subject of the Entrusted Management Agreement.
By Order of the Board
Huaneng Power International, Inc
Huang Long
Company Secretary
Beijing, the PRC
7th November 2002
[GRAPHIC OMITTED]
To: Business Editor
[For Immediate Release]
HUANENG POWER INTERNATIONAL, INC.
Entered into Management Agreement
with Huaneng Group and HIPDC
(Beijing, China, November 6, 2002) Huaneng Power International, Inc. (the
"Company") [NYSE: HNP; HKEx: 902; SSE: 600011] today entered into the
Management Agreement (the "Agreement") with China Huaneng Group (the
"Huaneng Group") and Huaneng International Power Development Corporation
("HIPDC") in Beijing. Pursuant to the Agreement, the Company agreed to
provide management services to Huaneng Group and HIPDC for the thermal
power plants managed and controlled by them. Huaneng Group and HIPDC will
pay management fee to the Company, and the total management fee per year is
approximately RMB 50.6 million. The Agreement was approved by the directors
of the Company at the Company's board meeting held on November 5, 2002.
As Huaneng Group owns 51.98% equity interest in HIPDC and HIPDC holds
42.58% shares of the Company, the transaction under the Agreement
constitutes a connected transaction for the Company, which should be
subject to the approval of the Company's independent shareholders at the
extraordinary general meeting to be held on December 23, 2002. Huaneng
Group, HIPDC, and their respective Associates will abstain from voting at
the extraordinary general meeting in respect of the resolutions relating to
the Agreement.
The Company is able to gain more management experience and further improve
the quality of its management abilities through the management of the
entrusted power plants. By the reason of above, the Company will be able to
further strengthen its leading position in the power generation market of
the PRC. At the same time of streamlining the management structure of the
thermal power generation assets of Huaneng Group, it also paves the way for
the further integration of the power generation assets of Huaneng Group.
Huaneng Power Int'l Inc. Entered into Entrusted Management Agreement with
Huaneng Group and HIPDC...P.2
Huaneng Power International, Inc. develops, constructs, operates and
manages large thermal power plants in China nationwide. With total net
generation capacity of 13,895MW, the Company is the largest independent
power producer in China.
- End -
For any details regarding this agreement, please refer to the announcements
published in Wen Wei Po and South China Morning Post dated November 7,
2002. The soft copy of the announcement will also be made available at the
following websites: Hong Kong Stock Exchange: http://www.hkex.com.hk The
Company: http://www.hpi.com.cn
For further information, please contact:
Ms. Meng Jing / Ms. Zhao Lin
Huaneng Power International, Inc.
Tel: (8610) 6649 1856 / 1866
Fax: (8610) 6649 1860
Email: ir@hpi.com.cn
Mr. Raymond Siu / Ms. Edith Lui
Rikes Communications Limited
Tel: (852) 2520 2201 / 9496 6188 / 9277 8595
Fax:(852) 2520 2241
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf
by the under- signed, thereunto duly authorized.
HUANENG POWER INTERNATIONAL, INC.
By /s/ Wang Xiaosong
-------------------------------
Name: Wang Xiaosong
Title: Vice Chairman
Date: November 7, 2002