BQ36 Barclays 27

RNS Number:0734Y
Zhejiang Southeast Elec Power Co Ld
28 April 2004





               Zhejiang Southeast Electric Power Company Limited



              Announcement on Asset Sale and Connected Transaction





Important reminder:



1.            Contents of the transaction:  After examination and approval at
the eighth meeting of the third board of directors (by way of communication) of
Zhejiang Southeast Electric Power Company Limited ("the Company"), it was agreed
to transfer all the 5,900,000 shares of Zhejiang Fuxing Electric Power Fuel
Limited Liability Company ("Fuxing") held by the Company ("the Shareholding") to
Zhejiang Xingyuan Investment Limited ("Xingyuan") and both parties have signed
the relevant Shareholding Transfer Agreement.



2.            Abstaining of the connected persons:  The Company and Xingyuan are
controlled by the same parent company.  According to the stipulations of the
Share Listing Rules of the Shanghai Stock Exchange, this transaction constitutes
a connected transaction of the Company and the connected directors have
abstained from voting on such matter at the board meeting.



3.            As the amount related to the shareholding transfer is below 5% of
the net assets of the Company or RMB30,000,000, it will not have a significant
impact on the continued operability, gains and losses and asset conditions of
the Company.





I.              Summary of the Transaction



In 2000, the Company contributed RMB5,900,000 to invest in 5,900,000 shares of
Fuxing, representing 3.93% of its total share capital.  As at the end of 2003,
the book investment cost of the Company was RMB5,900,000.  After examination and
approval at the eighth meeting of the third board of directors of the Company
(by way of communication), it was agreed to transfer the entire Shareholding to
Xingyuan and both parties have signed the relevant Shareholding Transfer
Agreement.



The Company and Xingyuan are controlled by the same parent company.  According
to the stipulations of the Share Listing Rules of the Shanghai Stock Exchange,
this transaction constitutes a connected transaction of the Company.  The
connected directors have abstained from voting on such matter at the board
meeting, and the non-connected directors unanimously agreed to this connected
transaction and the independent directors have expressed their independent
opinions.



According to the stipulations of the Company Law, "When shareholders transfer
their capital contribution to persons other than the shareholders, it must
obtain the consents of more than half of all the shareholders; under the same
conditions, other shareholders shall have the pre-emptive purchase right in
relation to such capital contribution."  Accordingly, such shareholding transfer
has yet to obtain the consents at the shareholders' meeting of Fuxing.



II.           Introduction of the Transferee



1.                Basic conditions of the Transferee



Xingyuan was established in August 2003 with a registered capital of
RMB50,000,000.  Its business scope is industrial investment; small-scale
hydroelectricity, small-scale thermal power, real estate investment;
infrastructure, information technology projects, environmental protection
projects; sale of power equipment sets, mechanical power equipments and metal
materials; and property management.  The legal representative is Fan Xiaoning.



2.                Relationship with the connected parties



Shareholders of Xingyuan are Zhejiang Provincial Energy Group Limited and
Zhejiang Provincial Power Development Company, having 90% and 10% shareholdings
in Fuxing respectively.



The largest shareholder of the Company is Zhejiang Provincial Power Development
Company who has a 39.80% shareholding in the Company.  Zhejiang Provincial Power
Development Company is a wholly-owned subsidiary of Zhejiang Provincial Energy
Group Limited, and Zhejiang Provincial Energy Group Limited is the actual
controller of the Company.



As the Company and Xingyuan are controlled by the same parent company, this
transaction constitutes a connected transaction of the Company according to the
stipulations of the Share Listing Rules of the Shanghai Stock Exchange.



Zhejiang Provincial Energy Group Limited is a provincial-level energy category
state-owned assets operation entity established by Zhejiang Provincial
Government in March 2001 with a registered capital of RMB3.5 billion.  Its
business scope is operation of the state-owned assets and state-owned
shareholdings of group companies and their subordinate enterprises authorised by
the State; industrial investment and development; technology advisory services.
The legal representative is Sun Yongsen.  As at the end of 2003, the total
assets of Zhejiang Provincial Energy Group Limited amounted to RMB36.17 billion
and net assets amounted to RMB16.7 billion.



3.                Basic conditions of the subject of the Transaction



Fuxing was established in December 2000 with a registered capital of
RMB150,000,000.  It is mainly engaged in the technical development and technical
services of electric power fuel and the sale of coal.  Its legal representative
is Zhang Jin.  Upon auditing by Zhejiang Wanbang Accounting Firm, as at the end
of 2003, the total assets of Fuxing amounted to RMB1.265 billion and net assets
amounted to RMB0.412 billion.



4.                Main contents and pricing of the transaction contract



Pursuant to the Shareholding Transfer Agreement entered into between the Company
and Xingyuan, the transfer price of the Shareholding is RMB17,782,586.42, which
comprises of the following two parts:



(1)               Base price



Upon asset valuation by Zhejiang Wanbang Asset Valuation Ltd using 30th April
2003 as the base date (Zhe Wan Ping Bao (2003) No.072), as at 30th April 2003,
the book balance of the net assets of Fuxing was RMB325,309,402.27 and the
valuation was RMB398,027,250.80 and the valuation increased by RMB70,505,826.98
or 21.53%.



Using the above valuation as the basis, the base price of the shareholding
transfer was confirmed to be RMB15,642,470.96.



(2)               New shareholders' interest



From the valuation base date of 30th April 2003 to 31st December 2003, new
shareholders' interest of the Shareholding amounted to RMB2,140,115.46.



The above transfer price totalled RMB17,782,586.42.  Xingyuan shall pay the
entire transfer price in one lump sum to the Company within seven working days
after the agreement becomes effective.



5.                Purpose and impact of the shareholding transfer



The purpose of this shareholding transfer is to strengthen the strategic
integration of the external investment projects of the Company and reduce direct
connected transactions of the Company.



As the amount of the shareholding transfer is below 5% of the net assets of the
Company or RMB30,000,000, it does not have a significant impact on the continued
operability, gains and losses and asset conditions of the Company.



6.                Opinion of the independent directors



1.                              The price of the shareholding transfer is fair
and reasonable without damaging the interest of the shareholders.



2.                              The shareholding transfer involves a connected
transaction and the connected directors have abstained from voting when
examining such proposal.  The voting procedures and results of the proposal are
lawful and valid.



3.                              The shareholding transfer is instrumental in
integrating the external investment projects of the Company and reducing direct
connected transactions.









Board of Directors

Zhejiang Southeast Electric Power Company Limited

28th April 2003










                      This information is provided by RNS
            The company news service from the London Stock Exchange
END

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