CHINA ENERSAVE LIMITED
(Incorporated in the Republic of Singapore)
Company Registration Number 199706776D
ANNOUNCEMENT
SHARE SUBSCRIPTION - ASIA POWER CORPORATION LIMITED
Introduction
The Directors of China Enersave Limited (the "Company") wish to announce that the
Company’s subsidiary, Renewable Energy Holdings Private Limited, has entered into a
subscription agreement dated 16 January 2008 (the "Subscription Agreement") with
Asia Power Corporation Limited (“APCL”) for the Company to subscribe (the
“Subscription”) for 40,000,000 new ordinary shares in the capital of APCL (the
“Subscription Shares”), representing approximately 9.88% of the enlarged issued
share capital of APCL immediately after the completion of the Subscription (the
“Completion”).
About APCL
APCL is a public company incorporated in Singapore in 5, Shenton Way, #25-02, UIC
Building, Singapore 068808 and listed on the Singapore Exchange Securities Trading
Limited (“SGX-ST”). APCL has an issued and paid-up capital of S$39,269,398.34
comprising 365,010,010 ordinary shares as at the date of this announcement.
The principal activities of APCL consist of owning, managing and operating of power
plants in China, including renewable energy power plants such as hydro power plants. It
also involves in the research, development and manufacture of power automation
systems and instruments, and the development and investment in information and
services relating to the electrical energy industry. In addition, it also involves in
providing power-related business consultation and management services in China.
The Subscription
The aggregate cash consideration for the Subscription payable on Completion is S$13.2
million at S$0.33 per Subscription Share (the “Subscription Price”). The Subscription
Price was arrived at on a willing buyer-willing seller basis, based on a PE ratio of 5.87
times the net consolidated profit after tax of APCL and its subsidiaries for FY2006, FY
2006 being the latest available audited results. This also represents a 6% discount to
the last 12-month average closing price of APCL of S$0.35.
The aggregate Subscription Price for the Subscription Shares will be funded by a loan
facility granted by ABN AMRO N.V.
The Subscription Shares, when issued and fully paid, will rank pari passu in all respects
with the existing ordinary shares (the “APCL Shares”) in the issued share capital of
Share Subscription - Asia Power Corporation Limited
APCL and shall carry all rights and entitlements similar to the APCL Shares except that
the Subscription Shares will not rank for any dividends, rights, allotments or other
distributions in the event that the Book Closure date falls before the date of the issue of
the Subscription Shares.
Completion, which shall not be on a date later than 30 days from the date of the
Subscription Agreement (or such other date as the parties may agree in writing), is
conditional upon the following conditions being fulfilled:-
(a) in-principle approval for the additional listing application (the “Application”) to the
SGX-ST for the Subscription Shares to be admitted to the Official List of the SGX-ST
and be listed for quotation on the Main Board of the SGX-ST, being obtained from
the SGX-ST and not having been revoked or amended;
(b) the allotment, issue and subscription of the Subscription Shares not being prohibited
by any statute, order, rule, regulation or directive promulgated or issued after the
date of the Subscription Agreement by any legislative, executive or regulatory body
or authority of Singapore which is applicable to the Company or APCL;
(c) there having been, as at the Completion Date, no change or any development
likely to result in a material adverse change in the condition, financial or otherwise,
of ACPL and its subsidiaries; and
(d) on the Completion Date, the undertakings and warranties of APCL contained the
Subscription Agreement herein being true, accurate and correct in all material
respects as if made on the Completion Date, with reference to the then existing
circumstances and the Company having performed in all material respects all of its
obligations hereunder to be performed on or before the Completion Date.
Rationale for the Proposed Subscription
The Board of Directors is of the view that the Transaction is in the best interests of the
Company for the following reasons:
(i) Asia Power is principally involved in the ownership, management and
ownership of power plants in China. Their portfolio includes three hydro
electric plants. A strategic relationship with Asia Power would create potential
benefits such as business synergy and reinforcement of our competencies
going forward.
(ii) This Transaction provides us with a strategic opportunity to further extend our
profile into the China market.
(iii) This is an opportunity to purchase a strategic interest in an established listed
company with a consistent profit track record.
Financial Effects
As the Subscription Shares represent only 9.88% of the enlarged issued share capital of
APCL after the completion of the Subscription, there will be no equity accounting by the
Company of the profits of APCL. Accordingly, the Subscription is not expected to have
any material effect on the net tangible assets per share of the Company for the financial
Share Subscription - Asia Power Corporation Limited
year ended 31 December 2008 assuming that the Subscription had been completed at
the beginning of that financial year.
Relative Figures as set out in Rule 1006 of the Listing Manual
The relative figures computed on the bases set out in Rule 1006 of the SGX-ST Listing
Manual are as follows:-
(i) Rule 1006(a) is not applicable in the present case as this involves the acquisition
of assets by the Company;
(ii) Rule 1006(b) is not applicable as in the present case, the Company is acquiring
only 9.88% of the enlarged issued share capital of APCL, and as such there would
not be any equity accounting by the Company of the profits of APCL and the
Subscription would only be classified as an investment;
(iii) Under Rule 1006(c), the aggregate Subscription Price for the Subscription Shares,
being S$0.33, is approximately 11.35% of the Company’s market capitalisation of
S$116.32 million as at 15 January 2008 , being the market day immediately
preceding this announcement; and
(iv) Rule 1006(d) is not applicable in the present case as the aggregate Subscription
Price for the Subscription Shares will be paid in cash.
Interests of Directors and Substantial Shareholders
None of the Directors of the Company has any interest, direct or indirect, in the
proposed Subscription.
The Directors are not aware of any substantial shareholder having any interest, direct or
indirect, in the proposed Subscription.
No Directors are proposed to be appointed to the APCL’s Board by the Company in
connection with the proposed Subscription.
Loan Facility provided by ABN AMRO BANK NV (the “Lender”)
The aggregate Subscription Price for the Subscription Shares will be funded by the
drawdown from a secured loan facility of US$20,000,000 to be provided by the Lender
pursuant to a Facility Agreement dated 11 January 2008 (the “Facility”).
By Order of the Board
Tan Ching Chek
Company Secretary
Date : 16 January 2008
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