Securities abbreviation: Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) Stock Code: 601669 Announcement No.: pro 2022-003 Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669)
About asset replacement with China Power Construction Group Co., Ltd
And related party transactions announcement
The board of directors and all directors of the company guarantee that there are no false records, misleading statements or major omissions in the contents of this announcement, and bear individual and joint liabilities for the authenticity, accuracy and completeness of its contents. Special tips:
In order to properly solve the problem of horizontal competition, Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) (hereinafter referred to as “the company”) plans to replace its real estate assets with the assets related to high-quality power grid auxiliary industry held by the controlling shareholder of the company, China Power Construction Group Co., Ltd. (hereinafter referred to as “power Construction Group”), The difference shall be paid by power construction group to the company in cash (hereinafter referred to as “this transaction” or “this asset replacement”). This transaction constitutes a connected transaction.
This connected transaction does not constitute a major asset restructuring as stipulated in the administrative measures for major asset restructuring of listed companies.
The amount of this connected transaction exceeds 5% of the audited net assets of the company as of December 31, 2020. This connected transaction shall be submitted to the general meeting of shareholders for deliberation and approval.
The counterparty power construction group made a commitment to the total net profit of the target company Shanghai Electric Power Co.Ltd(600021) Design Institute Co., Ltd. (hereinafter referred to as “Shanghai Institute”) placed in the assets during the profit compensation period (2022-2024) (hereinafter referred to as “committed net profit”), In addition, the company shall make cash compensation for the part where the accumulated net profit realized during the profit compensation period is less than the promised net profit.
1、 Overview of related party transactions
In order to properly solve the problem of horizontal competition between the power construction group and the company, the company plans to replace the assets with the power construction group. The company will replace the real estate sector assets held by the company (hereinafter referred to as “purchased assets”) with the high-quality power grid auxiliary industry related assets held by the power construction group (hereinafter referred to as “purchased assets” and “purchased assets” collectively referred to as “transaction object”). The transaction is planned to be conducted by means of non-public agreement transfer. The assessed value of owner’s equity (excluding perpetual bonds) of the assets as of the benchmark date of August 31, 2021 is RMB 24718805600, and the assessed value of owner’s equity (excluding perpetual bonds) of the assets as of the benchmark date of August 31, 2021 is RMB 2465346300. The difference between disposed assets and disposed assets is 65.3426 million yuan, which is paid to the company by power construction group in cash.
The invested assets are 100% equity of Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) group Huazhong electric power design and Research Institute Co., Ltd., Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) Group Hebei Electric Power Survey, design and Research Institute Co., Ltd., Sichuan Electric Power Design Consulting Co., Ltd., Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) group Jiangxi Electric Power Design Institute Co., Ltd 100% equity of Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) Group Fujian Electric Power Survey and Design Institute Co., Ltd., Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) group Guizhou electric power design and Research Institute Co., Ltd., Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) Group Jilin Electric Power Survey and Design Institute Co., Ltd., Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) group Qinghai Electric Power Design Institute Co., Ltd., Shanghai Institute Co., Ltd., Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) Group Hebei Engineering Co., Ltd 100% equity of Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) group Jiangxi Hydropower Engineering Bureau Co., Ltd., Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) Group Shandong Electric Power Construction First Engineering Co., Ltd., Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) group Guizhou Engineering Co., Ltd., Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) Group Chongqing Engineering Co., Ltd., Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) group Jiangxi Electric Power Construction Co., Ltd., Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) group Hubei Engineering Co., Ltd 100% equity of Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) Group Henan Engineering Co., Ltd., Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) group Nuclear Power Engineering Co., Ltd.
The disposed assets are 100% equity of Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) Real Estate Group Co., Ltd., 100% equity of Beijing Feiyue Lingkong Technology Industry Development Co., Ltd. and 100% equity of Tianjin Haifu Real Estate Development Co., Ltd. Power construction group, the counterparty of this transaction, is the controlling shareholder of the company. Therefore, this transaction constitutes a related party transaction of the company.
This transaction does not constitute a major asset reorganization specified in the administrative measures for major asset reorganization of listed companies. The amount of this connected transaction exceeds 5% of the audited net assets of the company as of December 31, 2020. This connected transaction shall be submitted to the general meeting of shareholders for deliberation and approval.
2、 Introduction to related parties
(i) Related party relationship
As of the disclosure date of this announcement, PowerChina group directly holds 8925803976 shares of the company, accounting for 58.34% of the total share capital of the company, and is the controlling shareholder of the company. According to the relevant provisions of the Listing Rules of Shanghai Stock Exchange, PowerChina group is an affiliated legal person of the company.
（2） Basic information of related parties
According to the reply of the State Council on issues related to the establishment of China Power Construction Group Co., Ltd. (Guo Han [2011] No. 103), power construction group completed its registration with the State Administration for Industry and Commerce on September 28, 2011. At present, the nature of the enterprise is a limited liability company (wholly state-owned), The registered address and main office address are 18 / F, building 2, yard 22, Chegongzhuang West Road, Haidian District, Beijing. The legal representative is Ding Yanzhang. The registered capital is 31863390100 yuan, and the state owned assets supervision and Administration Commission of the State Council holds 100% of its equity.
The main business of PowerChina group is survey and design consulting, China power engineering contracting, China Water Conservancy and hydropower engineering contracting, China infrastructure engineering, investment and development of power, water conservancy and other resources, real estate development and operation, equipment manufacturing and leasing, international operation and investment. In recent years, the power construction group’s main business has developed well, coordinating the two major markets of China and the world, giving full play to the core ability of understanding water and electricity and the advantages of industrial chain integration, and is committed to becoming a world-class quality and benefit comprehensive construction investment group with international competitiveness in the fields of energy, power, water resources, environment and infrastructure.
（3） Main financial data of related parties
As of December 31, 2020, the audited total assets and net assets of PowerChina group were RMB 1056.98 billion and RMB 271.228 billion respectively, and the audited total operating revenue and net profit in 2020 were RMB 541.558 billion and RMB 13.9 billion respectively.
（4） Description of other relationships
Except for directly holding the company’s shares and disclosed related party relationships and related transactions, PowerChina group has no relationship with the company in terms of property rights, business, assets, creditor’s rights and debts, personnel and other aspects.
3、 Basic information of related party transactions
(i) Basic information of transaction object
The invested assets in this transaction are the equity of 18 subsidiaries held by PowerChina group, and the invested assets are the equity of 3 subsidiaries held by the company. Please refer to the annex of this announcement for the basic information such as the industrial and commercial information of the subject matter of the transaction and the main financial indicators of the latest year and another period.
（2） Other information about the subject matter of the transaction
1. Waiver of preemptive right by other shareholders of the subject matter of the transaction
The two companies in the subject matter of this transaction, namely Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) group Jiangxi Electric Power Design Institute Co., Ltd. and Shanghai Institute, are the holding subsidiaries of power construction group. As of the disclosure date of this announcement, they have obtained the consent letter from other shareholders to waive the preemptive right; The remaining transaction targets are all wholly-owned subsidiaries of the company or power construction group, and do not involve the waiver of preemptive rights by other shareholders.
2. Ownership of the underlying equity of the transaction
The ownership of the underlying equity of the transaction is clear, and there is no mortgage, pledge or any other restriction on transfer. The purchase and placement of the company’s equity in this asset replacement does not involve major litigation, arbitration matters or judicial measures such as seizure and freezing, nor does it hinder the transfer of ownership.
3. The company’s funds occupied by the subject matter of the transaction or the funds occupied by related parties
As of November 30, 2021, the disposed assets have a non operating debt principal of RMB 13107.2095 million for the company and its subordinate enterprises (excluding disposed assets) and disposed assets. In order to solve the above-mentioned occupation of funds, the asset replacement agreement between Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) and China Power Construction Group Co., Ltd. (hereinafter referred to as “asset replacement agreement”) signed by the company and Power Construction Group has agreed that before the completion of the settlement of the purchased assets of this transaction, PowerChina group needs to take measures to ensure that the invested assets are repaid, and all the non operating debt principal and interest of the company and its subordinate enterprises (excluding the invested assets) and invested assets as of the closing.
As of November 30, 2021, the invested assets have enjoyed a non operating debt principal of RMB 728123500 for PowerChina group and its subsidiaries (excluding the company and its subsidiaries and invested assets). In order to solve the above-mentioned occupation of funds, the asset replacement agreement has agreed that before the completion of the settlement of the placed assets in this transaction, the power construction group shall take measures to ensure that the power construction group and its subordinate enterprises (excluding the company and its subordinate enterprises and placed assets) repay all non operating debt principal and interest on the placed assets.
4. Guarantee of transaction object
As of December 31, 2021, for the trust loan and banking status of the wholly-owned subsidiary of the company, the asset replacement agreement has agreed that before the completion of the delivery of the purchased assets of this transaction, PowerChina group will take measures to assist the company and the purchased assets to handle the cancellation of the guarantee provided by the company or its subsidiaries (excluding the purchased assets) for the purchased assets.
As of December 31, 2021, the company with the underlying assets in place had external guarantees, with a total guarantee balance of RMB 4588.5186 million. The company has fulfilled the internal decision-making and information disclosure procedures in accordance with the relevant provisions of the stock listing rules of Shanghai Stock Exchange. For the relevant contents, please refer to the announcement on the resolution of the 51st meeting of the Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) third board of directors published at the same time as this announcement and the announcement on the external guarantee of the company to be placed in the asset replacement. As of December 31, 2021, the company with the underlying assets has accepted the guarantee from related parties, with a total amount of 6098.8937 million yuan.
5. Entrusted financial management of transaction object
As of December 31, 2021, the company has no entrusted assets for financial management; There is no entrusted financial management for the placed assets.
（3） Pricing principles of related party transactions
1. Evaluation of transaction object
According to the asset appraisal report (zth [2021] p.z. No. 90053, zth [2021] p.z. No. 90054, zth [2021] p.z. No. 90055) issued by Beijing zhongtianhe Assets Appraisal Co., Ltd. on the assets disposed of in this transaction, as of August 31, 2021, the total net asset appraisal value of the assets disposed (excluding perpetual bonds) was 24718805600 yuan. According to the asset appraisal report (zlpbz [2021] No. 3788, zlpbz [2021] No. 3789, zlpbz [2021] No. 3790, zlpbz [2021] No. 3791, zlpbz [2021] No. 3792, llpbz [2021] No. 3793 and zlpbz [2021] No. 3793) issued by Zoomlion asset appraisal group Co., Ltd. on the assets placed in this transaction No. 3794, Zhong Lian Ping Bao Zi [2021] No. 3795, Zhong Lian Ping Bao Zi [2021] No. 3796, Zhong Lian Ping Bao Zi [2021] No. 3797, Zhong Lian Ping Bao Zi [2021] No. 3798, Zhong Lian Ping Bao Zi [2021] No. 3799, Zhong Lian Ping Bao Zi [2021] No. 3800, Zhong Lian Ping Bao Zi [2021] No. 3801, Zhong Lian Ping Bao Zi [2021] No. 3802, Zhong Lian Ping Bao Zi [2021] No. 3803 Zhonglian pingbao Zi [2021] No. 3804 and Zhonglian pingbao Zi [2021] No. 3805), as of August 31, 2021, the total assessed value of net assets (excluding perpetual bonds) of assets placed was 24653463000 yuan. The above asset appraisal report has been authorized to be filed with the state-owned assets supervision and administration institution. The evaluation of each target company is as follows:
Net asset book value net asset appraisal value added equity company name appraisal method (10000 yuan) (10000 yuan) value rate corresponding to net asset appraisal (%) valuation (10000 yuan)
(i) Disposed assets
Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) real estate asset collection foundation method 866580.711030635.2018.931030635.20 Group Co., Ltd. Beijing Feiyue Airport Branch
Technology industry development limited asset base method – 42404.28-188754.64-345.13-188754.64 company
Tianjin Haifu real estate asset base law 1630000.001630000.000.001630000.00 Development Co., Ltd
Total assets disposed out: 2454176.432471880.560.722471880.56
（2） Huahua asset Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) group
China Electric Power Design and research income law 181848.33230076.1926.52230076.19 Institute Co., Ltd. Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) group River
Income law of North Electric Power Survey and design 145508.23222326.7452.79
