SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
For the month of June 2008
PETROCHINA COMPANY LIMITED
16 ANDELU, DONGCHENG DISTRICT
BEIJING, THE PEOPLE'S REPUBLIC OF CHINA, 100011
(Address of Principal Executive Offices)
(Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F.)
Form 20-F X Form 40-F
--- ---
(Indicate by check mark whether the registrant by furnishing the
information contained in this Form is also thereby furnishing the information to
the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.)
Yes No X
--- ---
(If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): 82- )
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PetroChina Company Limited (the "Registrant") is furnishing under the cover
of Form 6-K the Registrant's announcement with respect to its acquisition of
Refined Products Sales Assets and Business from CNPC.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this announcement to be signed on its behalf by the
undersigned, thereunto duly authorized.
PetroChina Company Limited
Dated: June 12, 2008 By: /s/ Li Huaiqi
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Name: Li Huaiqi
Title: Company Secretary
The Stock Exchange of Hong Kong Limited takes no responsibility for the contents
of this announcement, makes no representation as to its accuracy or completeness
and expressly disclaims any liability whatsoever for any loss howsoever arising
from or in reliance upon the whole or any of the contents of this announcement.
(PETROCHINA COMPANY LIMITED LOGO)
PETROCHINA COMPANY LIMITED
(a joint stock limited company incorporated in
the People's Republic of China with limited liability)
(STOCK CODE: 857)
CONNECTED TRANSACTION
ACQUISITION OF REFINED PRODUCTS SALES ASSETS AND BUSINESS
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The Board announces that the Company has entered into the Acquisition Agreement
with CNPC on 10 June 2008, pursuant to which the Company has agreed to acquire
the Refined Products Sales Assets and Business from CNPC. Upon completion of the
Acquisition Agreement, the Company will pay consideration in the sum of
RMB1,004,530,000 (approximately HK$1,116,144,444) to CNPC, representing the
value of the net assets of the Refined Products Sales Assets and Business as at
the Valuation Date. The parties will adjust the consideration by reference to
the net assets generated by the Refined Products Sales Assets and Business for
the period from the Valuation Date to the Completion Date as shown in the
management accounts.
CNPC is the controlling shareholder of the Company holding 86.29% of the issued
share capital of the Company as at the date of this announcement. Pursuant to
the Listing Rules, CNPC is a connected person of the Company and the Acquisition
constitutes a connected transaction of the Company.
Since the applicable percentage ratio for the Acquisition is more than 0.1% but
less than 2.5%, the Acquisition is only subject to the reporting and
announcement requirements and is exempt from the independent shareholders'
approval requirement under the Listing Rules.
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ACQUISITION AGREEMENT
DATE
10 June 2008
PARTIES
Vendor: CNPC
Purchaser: the Company
THE ACQUISITION AND ASSETS TO BE ACQUIRED
Subject to satisfaction of the conditions precedent under the Acquisition
Agreement, the Company has agreed to acquire, and CNPC has agreed to sell and to
procure the sale by the related entities of CNPC, the assets and operations of
the refined products marketing operations and assets owned by entities held by
CNPC located in 16 provinces, municipalities and autonomous regions in the PRC.
The Refined Products Sales Assets and Business mainly comprise 208 units of
service stations and 25 units of oil tanks, of which including the equity
interests in the following 8 companies whose principal businesses are refining
and marketing of refined products:
1. 15.67% interest in Zhongyou Beijing Sales Company Limited (CHINESE
CHARACTERS)
2. 35.64% interest in Shanghai Oil and Gas Bailianjing Service Station
Company Limited (CHINESE CHARACTERS)
3. 49% interest in Shanghai Zhongyou Oil and Gas Enterprise Company
Limited (CHINESE CHARACTERS)
4. 75% interest in Shanghai Zhongyou Taihe Service Station Company
Limited (CHINESE CHARACTERS)
5. 100% interest in Dalian Economic and Technology Development Zone LPG
and Petroleum General Company (CHINESE CHARACTERS)
6. 100% interest in Hebei Zhongyou Sales Company Limited (CHINESE
CHARACTERS)
7. 100% interest in Beijing Huayou Petroleum Company Limited (CHINESE
CHARACTERS)
8. 100% interest in Tianjin Huabei New Petroleum Technologies Development
Enterprise General Company (CHINESE CHARACTERS)
(each a "SUBJECT COMPANY" and together the "SUBJECT COMPANIES")
CONSIDERATION
The Acquisition was negotiated and entered into on an arm's length basis and on
normal commercial terms. Pursuant to the Acquisition Agreement, the Company will
pay consideration in the sum of RMB1,004,530,000 (approximately
HK$1,116,144,444) to CNPC, representing the net asset value of the Refined
Products Sales Assets and Business as at the Valuation Date. The parties will
adjust the consideration by reference to the net assets generated by the Refined
Products Sales Assets and Business for the period from the Valuation Date to the
Completion Date as shown in the management accounts for that period. The Company
will pay the consideration together with the adjustment to the consideration in
cash to CNPC out of the internal resources of the Company. The adjustment to the
consideration is expected to be paid by the Company to CNPC within one month
after the Completion Date. After taking into account the above adjustments, the
consideration is expected to be less than 2.5% of the relevant percentage ratio
of the Company.
In the event the net assets generated by the Refined Products Sales Assets and
Business for the period from the Valuation Date to the Completion Date as shown
in the management accounts for that period is higher than the value of the net
assets of the Refined Products Sales Assets and Business as at the Valuation
Date, the Company shall pay such difference in cash to CNPC and vice versa on a
dollar for dollar basis. The above consideration was determined based on the
valuation report as of the Valuation Date prepared by China Enterprises
Appraisal Company Inc., Beijing, an independent valuer.
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According to the audited reports of Zhongtianyun Accountants Limited (CHINESE
CHARACTERS) and Beijing Tianyuanquan Accountants Limited (CHINESE CHARACTERS),
as at the Valuation Date, the total audited net book value (prepared based on
the PRC GAAP) of the Refined Products Sales Assets and Business to be acquired
under the Acquisition is RMB924,040,000 (approximately HK$1,026,711,111).
According to the valuation prepared by China Enterprises Appraisal Company Inc.,
Beijing, as at the Valuation Date, the valuation amount of the Refined Products
Sales Assets and Business is RMB1,004,530,000 (approximately HK$1,116,144,444)
which is mainly based on replacement cost valuation method, with an appreciation
of RMB80,490,000 (approximately HK$89,433,333) or appreciation rate of 8.71%.
The Refined Products Sales Assets and Business can be divided into two
categories. The first category is equity interest related assets with an audited
net book value of RMB208,380,000 (approximately HK$231,533,333) and a valuation
amount of RMB232,580,000 (approximately HK$258,422,222), with an appreciation of
RMB24,200,000 (approximately HK$26,888,889) or appreciation rate of 11.62%. The
second category is non-equity related assets with an audited net book value of
RMB715,660,000 (approximately HK$795,177,778) and a valuation amount of
RMB771,950,000 (approximately HK$857,722,222), with an appreciation of
RMB56,290,000 (approximately HK$62,544,444) or appreciation rate of 7.86%. As
the Company considers the value of the relevant assets does not fluctuate
substantially over time, the valuation prepared by reference to the Valuation
Date is considered to be reasonable.
The unaudited net profit before and after tax of the Subject Companies for the
financial year ended 31 December 2006 amounted to approximately RMB16,737,405
(approximately HK$18,597,177) and RMB5,729,334 (approximately HK$6,365,927)
respectively. The unaudited net profit before tax of the Subject Companies for
the financial year ended 31 December 2007 amounted to approximately RMB5,106,329
(approximately HK$5,673,699) and their unaudited net loss after tax amounted to
RMB2,644,068 (approximately HK$2,937,853). The above figures were based on the
management accounts of the Subject Companies for the respective financial year
prepared in accordance with the PRC GAAP. The Company understands that, as the
remaining of the Refined Products Sales Assets and Business are not separate
accounting entities, the relevant sellers do not have separate information on
the net profit/loss before and after tax that is attributable to these remaining
Refined Products Sales Assets and Business.
The original purchase cost of these assets, reflected from the aggregate of the
paid-up capital in the accounts of the Subject Companies, amounted to
approximately RMB147,651,100 (approximately HK$164,056,778). As CNPC developed
the Refined Products Sales Assets and Business over a number of years in the
past, the original purchase cost of these assets (other than the paid-up capital
of the Subject Companies) was unavailable.
CONDITIONS PRECEDENT TO COMPLETION OF THE ACQUISITION AGREEMENT
Completion of the Acquisition Agreement is subject to the satisfaction of
certain conditions precedent, including:
(a) the Company having obtained all necessary consents and approvals from all
relevant parties in connection with the transfer of the assets of the
Refined Products Sales Assets and Business including without limitation,
approval within CNPC, the other shareholders in respect of transfer of the
equity interests in the Subject Companies and other internal approvals and
having
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completed the filing of the valuation report of the Refined Products Sales
Assets and Business with SASAC and obtained approval from SASAC in relation
to the transfer by means of agreement; and
(b) the representations, warranties and undertakings given by CNPC being true,
accurate, complete and valid as at the date of completion.
COMPLETION
Completion shall take place on the date on which all conditions precedent of the
Acquisition Agreement are satisfied and the Company shall pay the Consideration,
which day shall not be later than 30 business days after the fulfillment of all
the conditions precedent.
REASONS FOR THE ACQUISITION AND BENEFIT TO THE COMPANY
The Board considers that the acquisition of the assets of the Refined Products
Sales Assets and Business is in line with the development strategies of the
Group as a whole.
The Acquisition enables the Company to further leverage on its economy of scale,
to strength control over the sales end of refined oil, and achieve intensive
operations, professional management in the sale of refined oil and coordinating
development targets as a whole. The Acquisition enables efficient allocation of
resources by the Company, enhances competitiveness and control at the end
market, brings new development opportunities and strengthens the ability to
generate yield to shareholders.
The Acquisition will also reduce connected transactions between CNPC and the
Company to a certain extent and to minimize competition. Upon completion of the
Acquisition, CNPC will cease to engage in operations in relation to the
marketing of refined products.
RELATIONSHIP BETWEEN THE PARTIES AND CONNECTED TRANSACTION
CNPC is the controlling shareholder (as defined in the Listing Rules) of the
Company holding 86.29% of the issued share capital of the Company. Pursuant to
the Listing Rules, CNPC is a connected person of the Company and the Acquisition
constitutes a connected transaction of the Company. Since the applicable
percentage ratio for the Acquisition is more than 0.1% but less than 2.5% for
the Group, the Company is only subject to the reporting and announcement
requirement and is exempt from the independent shareholders' approval
requirement under the Listing Rules.
The Board (including the independent non-executive directors of the Company)
considers that the terms of the Acquisition Agreement are on normal commercial
terms and are fair and reasonable and in the interests of the Company and its
shareholders as a whole.
INFORMATION ON THE COMPANY
BUSINESS OF THE COMPANY
The Company is principally engaged in petroleum and natural gas-related
activities, including:
(a) the exploration, development, production and sale of crude oil and natural
gas;
(b) the refining, transportation, storage and marketing of crude oil and
petroleum products;
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(c) the production and sale of basic petrochemical products, derivative
chemical products and other petrochemical products; and
(d) the transmission of natural gas and crude oil, and the sale of natural gas.
BUSINESS OF CNPC
The principal business activities of CNPC and its subsidiaries include a broad
spectrum of upstream and downstream activities, domestic marketing and
international trade, provision of operational services and technical support,
and equipment manufacturing and supply. The group is also a major producer and
supplier of petrochemical products.
DEFINITIONS
In this announcement, unless otherwise defined, the following terms shall have
the following meanings:
"Acquisition" the acquisition of the interests and assets of
the Refined Products Sales Assets and Business
from CNPC and its related entities by the
Company pursuant to the Acquisition Agreement
"Acquisition Agreement" the acquisition agreement dated 10 June 2008
entered into between the Company and CNPC in
respect of the Acquisition
"Board" the board of directors of the Company,
including the independent non-executive
directors of the Company
"CNPC" China National Petroleum Corporation, a State-
owned enterprise incorporated under the laws of
the PRC and the controlling shareholder of the
Company
"Company" PetroChina Company Limited, a joint stock
limited company incorporated in the PRC under
the Company Law of the PRC, and listed on the
Shanghai Stock Exchange and main board of The
Stock Exchange of Hong Kong Limited with
American depository shares listed on the New
York Stock Exchange, and its subsidiaries
"Completion Date" the date on which all conditions precedent of
the Acquisition Agreement are satisfied and the
Company shall pay the Consideration, which day
shall not be later than 30 business days after
the fulfillment of all the conditions
precedent
"Listing Rules" the Rules Governing the Listing of Securities
on The Stock Exchange of Hong Kong Limited
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"Refined Products Sales assets and business of the refined products
Assets and Business" marketing operations owned by entities held by
CNPC located in 16 provinces, municipalities
and autonomous regions in the PRC, comprising
208 units of service stations and 25 units of
oil tanks, of which including the equity
interests in the following 8 companies whose
principal businesses are refining and marketing
of refined products
(1) 15.67% interest in Zhongyou Beijing Sales
Company Limited (CHINESE CHARACTERS)
(2) 35.64% interest in Shanghai Oil and Gas
Bailianjing Service Station Company
Limited (CHINESE CHARACTERS)
(3) 49% interest in Shanghai Zhongyou Oil and
Gas Enterprise Company Limited (CHINESE
CHARACTERS)
(4) 75% interest in Shanghai Zhongyou Taihe
Service Station Company Limited
(CHINESE CHARACTERS)
(5) 100% interest in Dalian Economic and
Technology Development Zone LPG and
Petroleum General Company (CHINESE
CHARACTERS)
(6) 100% interest in Hebei Zhongyou Sales
Company Limited (CHINESE CHARACTERS)
(7) 100% interest in Beijing Huayou Petroleum
Company Limited (CHINESE CHARACTERS)
(8) 100% interest in Tianjin Huabei New
Petroleum Technologies Development
Enterprise General Company (CHINESE
CHARACTERS)
"PRC" The People's Republic of China
"PRC GAAP" the China accounting standards
"SASAC" the State-owned Asset Supervision and
Administration Commission of the State Council
"Valuation Date" (1) in respect of the 100% interest in Hebei
Zhongyou Sales Company Limited (CHINESE
CHARACTERS), refers to 31 July 2007
(2) in respect of the 100% interest in Beijing
Huayou Petroleum Company Limited (CHINESE
CHARACTERS), the 100% interest in Tianjin
Huabei New Petroleum Technologies
Development Enterprise General Company
(CHINESE CHARACTERS) and the assets
associated with the Yizhuang Service
Station (CHINESE CHARACTERS) owned by
China Petrochemical Company (CHINESE
CHARACTERS) under China Huayou Group
(CHINESE CHARACTERS), refers to 31 August
2007
(3) in respect of other Refined Products Sales
Assets and Business, refers to 31 December
2007
"HK$" Hong Kong dollars, the lawful currency of Hong
Kong Special Administrative Region, PRC
"RMB" Renminbi, the lawful currency of the PRC
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By order of the Board
PETROCHINA COMPANY LIMITED
LI HUAIQI
Company Secretary
10 June 2008
Beijing, the PRC
As at the date of this announcement, the Board of Directors comprises Mr Jiang
Jiemin as the Chairman; Mr Zhou Jiping (Vice Chairman) and Mr Liao Yongyuan as
executive Directors; Mr Wang Yilin, Mr Zeng Yukang, Mr Wang Fucheng, Mr Li
Xinhua, Mr Wang Guoliang and Mr Jiang Fan as non-executive Directors; and Mr
Chee-Chen Tung, Mr Liu Hongru, Mr Franco Bernabe, Mr Li Yongwu and Mr Cui Junhui
as independent non-executive Directors.
In this announcement, RMB has been translated into HK$ at the rate close to the
date of the Acquisition Agreement of HK$1= RMB0.9 for reference purpose only.
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