December 03, 2008

Datang to set up Keqi coal based gas company

Datang International Power Generation Co has announced that it entered into an investment agreement with Beijing Gas Group, CDC and New Horizon Capital to establish Keqi Coal based Gas Company. Following the agreement, Keqi Gas Company registered initial capital of CNY 100 million, which is equal to around HKD 111 million.

Datang International noted that for setting up the gas company all of them would contribute in the proportion of 51%, 33%, 6% and 10% in cash, respectively. The new gas company will deal with the planning, construction and operation of the Keqi Coal based Gas Project. Datang International stated that internal resources would fund its contribution to the registered capital of gas company.

The gas project involves a total investment of about CNY 18.78 billion, which is equal to around HKD 20.87 billion. The total capital obligation of Datang International will be CNY 9.58 billion that is 51% of the total investment. The final registered capital of Keqi Gas Company is approximately 30% of the total investment of the project which is around CNY 5.63 billion equivalent to nearly HKD 6.26 billion.

The Investment Agreement will become effective when the parties to the agreement obtain internal approvals and the approvals from the appropriate government authorities of the PRC for the investment items in the Investment Agreement, Datang International noted. The parties assented that they would raise the registered capital of Keqi Gas Company in stages on the basis of the construction progress of the project, and all of them will add to the increased registered capital in the same proportion as their respective contributions to the aforesaid initial registered capital of Keqi.

The term of operation of Keqi shall be 30 years from the date of issuance of the relevant business license.