Quantcast

China Hydroelectric Corporation Executes Definitive Agreement to Acquire Additional Hydroelectric Power Project in Yunnan Province and Provides Update on Pending Acquisitions

April 14, 2010

NEW YORK, April 14 /PRNewswire-Asia-FirstCall/ — China Hydroelectric
Corporation (NYSE: CHC, CHC-WS) (“China Hydroelectric” or the “Company”), a
consolidator, developer and operator of small hydroelectric power projects in
the People’s Republic of China (“PRC”), today announced it has signed a
definitive agreement to acquire an additional 19 MW hydroelectric power
project in Yunnan province of the PRC. Together with the previously announced
pending acquisition of a 44 MW hydroelectric power project in Yunnan province,
the projects would add a total of 63 megawatts (“MW”) to the Company’s
portfolio of operating hydroelectric assets. In addition, the Company
announced it has entered into two memoranda of understanding regarding the
acquisition by the Company of an additional 18 0 MW of operating hydroelectric
assets, 125 MW of projects currently under construction and 341 MW of
development rights for new projects. Along with the definitive agreements,
these memoranda present the Company with the opportunity to acquire 709 MW of
hydroelectric power projects and development rights.

The new definitive agreement provides for the Company to acquire 100% of
the 19 MW Husahe Project, located in Yunnan province in the People’s Republic
of China
, for a purchase price of US $15.5 million (RMB 106 million). This
acquisition, for which the Company had a MOU and which is expected to be
consummated shortly, will be financed through cash on hand and a note from the
seller which may be refinanced with non-recourse bank debt from a local
institution. Previously the Company had announced that it had executed a
definitive agreement for the Company to acquire 100% of the 44 MW Xiaopengzu
Project, also located in Yunnan province, for a purchase price of US $57
million
(RMB 390 million). This acquisition, which the Company anticipates
consummating within the next 45 days, is expected to be financed through cash
on hand and bank financing expected to be provided under the terms of the
Company’s previously announced Loan Framework Agreement with the Bank of
China’s Fujian Branch. Both acquisitions are subject to customary closing
conditions, including obtaining governmental approvals.

The two memoranda of understanding provide the Company with the exclusive
right to acquire: i) a majority interest to 100% control

           in the

Taiyu Projects, a group of seven operating hydroelectric projects aggregating
114.4 MW in Fujian province; and ii) 100% of the Minrui Projects, a group of
projects in Yunnan province including 4 operating hydroelectric projects
aggregating 66 MW, 3 projects under construction aggregating 125 MW, and the
development rights to 9 projects aggregating 341 MW.

The Company has made down payments with respect to the Taiyu and Minrui
Project memoranda, which include penalties to the sellers for cancellation.
Subject to the satisfactory completion of its due diligence review, the
Company expects to enter into definitive agreements to acquire and finance
these projects in the near term.

“We are pleased to be able to enter into the definitive agreements and the
memoranda of understanding to acquire these projects at expected price levels
in Fujian and Yunnan provinces,” said Chairman & CEO John D. Kuhns of China
Hydroelectric Corporation. “Our ability to acquire and finance projects has
accelerated as a result of our larger than expected amount of IPO proceeds and
favorable US $440 million (RMB 3 billion) loan framework agreement from the
Bank of China’s Fujian branch. Completion of these transactions would
represent: first, significant progress towards our plan to acquire
approximately 250 megawatts of operating hydroelectric projects during the
first half of 2010; second, additional megawatts coming on line during 2011 as
the construction projects are completed; and third, organic growth through an
enhanced development portfolio under our control.”

About China Hydroelectric Corporation

China Hydroelectric Corporation (“CHC” or the “Company”) is a consolidator,
developer and operator of small hydroelectric power projects in the People’s
Republic of China
. Led by an international management team, the Company’s
primary business is to identify and evaluate acquisition and development
opportunities and acquire, and in some cases construct, small hydroelectric
power plants in China. China produces approximately 22% of its total energy
from hydroelectric energy. The Company currently owns twelve operating
hydropower projects in China with total installed capacity of 377 MW. These
projects are located in four provinces: Zhejiang, Fujian, Yunnan and Sichuan.
In addition, CHC recently expanded operations through the acquisition, pending
government approval, of development rights to a 1,000 MW pumped storage
hydropower plant in Henan.

For further information about China Hydroelectric Corporation, please
visit the Company’s website at http://www.chinahydroelectric.com .

Cautionary Note Regarding Forward-looking Statements:

Statements contained herein that address operating results, performance,
events or developments that we expect or anticipate will occur in the future
are forward-looking statements. The forward-looking statements include, among
other things, statements relating to our business strategies and plan of
operations, our ability to acquire hydroelectric assets, our capital
expenditure and funding plans, our operations and business prospects, projects
under development, construction or planning and the regulatory environment.
The forward-looking statements are based on our current expectations and
involve a number of risks, uncertainties and contingencies, many of which are
beyond our control, which may cause actual results, performance or
achievements to differ materially from those anticipated. Should one or more
of these risks or uncertainties materialize, or should underlying assumptions
prove incorrect, actual results may vary materially from those anticipated,
estimated or projected. Among the factors that could cause actual results to
materially differ include: supply and demand changes in the electric markets,
changes in electricity tariffs, hydrological conditions, our relationship with
and other conditions affecting the power grids we service, our production and
transmission capabilities, availability of sufficient and reliable
transmission resources, our plans and objectives for future operations and
expansion or consolidation, interest rate and exchange rate changes, the
effectiveness of our cost-control measures, our liquidity and financial
condition, environmental laws and changes in political, economic, legal and
social conditions in China, and other factors affecting our operations that
are set forth in our Prospectus dated January 25, 2010 and filed with the
Securities and Exchange Commission (the “SEC”) and in our future filings with
the SEC. Unless required by law, the Company undertakes no obligation to
publicly update or revise any forward-looking statements, whether as a result
of new information, future events or otherwise.

    For more information, please contact:

    Company:

    China Hydroelectric Corporation
     Mary Fellows, EVP and Secretary
     Phone: +1-860-435-7000
     Email: mfellows@chinahydroelectric.com

    Investor Relations:

    HC International, Inc.
     Scott Powell
     Phone: +1-917-721-9480
     Email: scott.powell@hcinternational.net

SOURCE China Hydroelectric Corporation


Source: newswire



comments powered by Disqus