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August 2009 – A decisive progress has been made for the public listing of China Three Gorges Project Corporation (CTGPC). On August 14, 2009, the Board of Directors of China Yangtze Power Co. (CYPC) formally endorsed the proposed plan for CYPC’s restructure. Said plan along with a draft report on related transaction(s) was made publicly available for investor the next day.
The endorsement clears the way for CYPC to acquire the assets of CTGPC and make the latter ready for public listing. CTGPC’s primary assets consist of its hydroelectricity generation facilities and stakes in peripheral service companies. The takeover is likely to involve CYPC’s issuing shares to CTGPC in exchange of CTGPC’s assets with a total estimated value of over $ 2.93 billion U.S. Dollars. In addition, CYPC shall remit to CTGPC, by cash, approximately $5.45 billion U.S. Dollars within one year following the closing and assume all of GTGPC’s outstanding debts. The total value of the acquisition is estimated to be approximately $15.71 billion U.S. Dollars.
The merger has attracted extensive attention from the capital market. The stock price of CYPC has soared since its public announcement of the plan for restructure and acquisition in May, 2009.
As legal counsel to CTGPC, DeHeng Law Offices has played a significant role in the foregoing series of transactions. Dr. Wang Li, the managing partner of DeHeng Law Offices has been named the project director. Senior partner Guo Kejun, Esq. is serving as the lead counsel. Since May, 2008, the DeHeng team has made the blueprint for the project, prepared numerous legal documents and resolved various legal issues, which pave the way to a much anticipated successful public listing.
The foregoing transactions are still subject to the approvals from CYPC’s shareholders, the State-owned Assets Supervision and Administration Commission of the State Council and China Securities Regulatory Commission, respectively.
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