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 April 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
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(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
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(If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): 82- )
PetroChina Company Limited (the "Registrant") is furnishing under the cover
of Form 6-K the Registrant's announcement regarding its connected transaction
assets acquisition.
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: April 30, 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 LOGO)
(CHINESE CHARACTER)
PETROCHINA COMPANY LIMITED
(a joint stock limited company incorporated in the People's Republic of China
with limited liability)
(STOCK CODE: 857)
CONNECTED TRANSACTION
ASSETS ACQUISITION
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The Board wishes to announce that the Company has entered into the Acquisition
Agreement with CNPC on 28 April 2008, pursuant to which the Company has agreed
to acquire the assets of the Northeast China Inspection and Maintenance
Operations from CNPC. Upon completion of the Acquisition Agreement, the Company
will pay consideration in the sum of RMB43,832,200 (approximately HK$48,702,444)
to CNPC, representing the value of the net assets of the Northeast China
Inspection and Maintenance Operations as at 30 September 2007. The parties will
adjust the consideration by reference to the net assets generated by the
Northeast China Inspection and Maintenance Operations for the period from 1
October 2007 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
28 April 2008
PARTIES
Vendor: CNPC
Purchaser: the Company
THE ACQUISITION
Subject to satisfaction of the conditions precedent under the Acquisition
Agreement, the Company will acquire the net assets of the Northeast China
Inspection and Maintenance Operations. The Northeast China Inspection and
Maintenance Operations mainly comprises the inspection and maintenance services
in relation to the refining and chemical operations in Northeast China and
comprise interests and assets in the following companies / entities:
(1) 100% interest in Jinzhou Petrochemical Limited Design House (CHINESE
CHARACTER), whose principal business is the designing for engineering
projects for oil refining and petrochemical operations;
(2) 100% interest in PetroChina Jinxi Petrochemical Design House (CHINESE
CHARACTER), whose principal business is the designing for engineering
projects for oil refining and petrochemical operations;
(3) 100% interest in Jihua Group Mechanics Limited (CHINESE CHARACTER), whose
principal business is the manufacturing of petrochemical equipment;
(4) 100% interest in Jilin Engineering Supervision Limited (CHINESE CHARACTER),
whose principal businesses are supervising construction projects,
engineering consultation and pricing consultation;
(5) 100% interest in CNPC Fushun Engineering Supervision Limited (CHINESE
CHARACTER), whose principal businesses are conducting installations for
engineering projects, civil engineering, inspection and maintenance works,
and mechanical processing; and
(6) the entire assets in Northeast China Branch Company, CNPC Engineering
Design Limited (CHINESE CHARACTER), whose principal businesses are
providing domestic and international engineering design service and
contracting for engineering projects.
The assets comprising the Northeast China Inspection and Maintenance Operations
include but not limited to:
(1) land use rights, properties, and buildings, cash, bank deposit,
inventories, accounts receivable, machineries and equipment associated with
the inspection and maintenance business; and
(2) rights and obligations under agreements entered into by the entities in
relation to the inspection and maintenance business.
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 RMB43,832,200 (approximately HK$48,702,444) to
CNPC, representing the net assets value of the Northeast China Inspection and
Maintenance Operations as at 30 September 2007. The parties will adjust the
consideration by reference to the net assets generated by the Northeast China
Inspection and Maintenance Operations for the period from 1 October 2007 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
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adjustment to the consideration is expected to be paid by the Company to CNPC
within 45 days after the Completion Date.
In the event the net assets generated by the Northeast China Inspection and
Maintenance Operations for the period from 1 October 2007 to the Completion Date
as shown in the management accounts for that period is higher than the value of
the net assets of the Northeast China Inspection and Maintenance Operations as
at 30 September 2007, the Company shall pay such difference in cash to CNPC on a
dollar for dollar basis. The above consideration was determined based on the
valuation report as of 30 September 2007 prepared by China United Assets
Appraisal Co., Ltd., Beijing, an independent valuer. According to the valuer's
reports with valuation based on the cost method, as at 30 September 2007, the
total value of the net assets of the Northeast China Inspection and Maintenance
Operations to be acquired under the Acquisition is RMB43,832,200 (approximately
HK$48,702,444).
The audited net loss before and after tax attributable to the assets of the
Northeast China Inspection and Maintenance Operations for the financial year
ended 31 December 2006 amounted to approximately RMB34,350,000 (approximately
HK$38,166,667) and RMB55,834,000 (approximately HK$62,037,778) respectively
which were based on the management accounts of the assets of the Northeast China
Inspection and Maintenance Operations prepared in accordance with the Generally
Accepted Accounting Principles of the PRC. The audited net loss before and after
tax attributable to the assets of the Northeast China Inspection and Maintenance
Operations for the financial year ended 31 December 2007 amounted to
approximately RMB186,691,000 (approximately HK$207,434,444) and RMB199,133,000
(approximately HK$221,258,889) respectively were also prepared in accordance
with the Generally Accepted Accounting Principles of the PRC. The original
purchase cost of these assets, reflected from the aggregate of the paid-up
capital in the accounts of the entities and assets comprising the Northeast
China Inspection and Maintenance Operations, amounted to approximately
RMB289,783,000 (approximately HK$321,981,111).
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 completed due diligence on the Northeast China
Inspection and Maintenance Operations;
(b) the Company having obtained all necessary consents of the creditors and any
other relevant third parties in connection with the transfer of the assets
of the Northeast China Inspection and Maintenance Operations;
(c) there having been no material adverse change to the business operation and
technical performance of the Northeast China Inspection and Maintenance
Operations; and
(d) the representations, warranties and undertakings given by CNPC being true,
accurate, complete and valid as at the date of completion.
The parties shall use reasonable endeavours to procure that the conditions
precedent to be fulfilled on or before 30 April 2008. In the event that any of
the conditions precedent has not been fulfilled on or before 30 April 2008 by
reason of CNPC, the Company shall be entitled to terminate the Acquisition
Agreement.
COMPLETION
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Completion is expected to take place 30 April 2008 or the date on which all
conditions precedent of the Acquisition Agreement are satisfied, whichever is
later.
REASONS FOR THE ACQUISITION AND BENEFIT TO THE COMPANY
The Company is principally engaged in the exploitation of oil and gas resources
in the PRC. The Board considers that the acquisition of the assets of the
Northeast China Inspection and Maintenance Operations is in line with the
development strategies of the Group as a whole.
Following the Company's expansion in the production scale of its refining and
chemical businesses and increase in equipment used, the installation, design,
supervision, inspection and maintenance works will be remained at a high growth
rate. At present, inspection and maintenance services of the refining and
chemical businesses are undertaken by various local branch companies. The
resources allocation for inspection and maintenance services in the Northeast
China are not concentrated and business developments was imbalanced resulting
from factors like the operations run by the holding entity and local
environments. These have impaired the development of the inspection and
maintenance business.
The Acquisition is intended to enhance the ability to safely and smoothly
operate the inspection and maintenance services, and to consolidate the
inspection and maintenance resources of the target entities, with a view to form
a comprehensive production chain for the technological servicing of refining and
chemical works. This would enable the unification of design, purchasing and
construction, and subsequent operations and maintenance services, thereby
strengthening and ensuring the inspection and maintenance services in a steady
manner. This will also secure the implementation of new mechanisms of the
refining and chemical business. The Acquisition will also reduce connected
transactions between CNPC and the Group to a certain extent, improve enforcement
of projects, and lead to improvements on the production chain of the refining
and chemical businesses, with a view to uplift servicing capacity
comprehensively and create synergy, and hence improving the technology level and
competitiveness of the inspection and maintenance services of the refining and
chemical business. The Acquisition will play an important role to the Company's
adopting centralized resource allocation and human resources management, to
maximize the Company's edge on resources in human resources, materials and
technologies, to formulate inspection and maintenance quotas scientifically, to
coordinate plans on inspection and maintenance services, balancing workload in
providing services, to improve quality of the services provided, and to
effectively increase the profitability of the inspection and maintenance
business, hence maximizing value to the shareholders of the Company in the long
run.
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.
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INFORMATION ON THE GROUP
BUSINESS OF THE GROUP
The Group 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;
(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
Northeast China Inspection and Maintenance
Operations from CNPC by the Company pursuant to
the Acquisition Agreement
"Acquisition Agreement" the acquisition agreement dated 28 April 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 (CHINESE
CHARACTER), 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
"Completion Date" 30 April 2008 or the date on which all conditions
precedents of the Acquisition Agreement are
satisfied, whichever is later
"Group" the Company and its subsidiaries
"Listing Rules" the Rules Governing the Listing of Securities on
The Stock Exchange of Hong Kong Limited
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"Northeast China the inspection and maintenance services in
Inspection and relation to the refining and chemical operations
Maintenance Operations" in Northeast China, which comprise interests and
assets in the following companies / entities:
(1) 100% interest in Jinzhou Petrochemical
Limited Design House (CHINESE CHARACTER)
(2) 100% interest in PetroChina Jinxi
Petrochemical Design House (CHINESE
CHARACTER)
(3) 100% interest in Jihua Group Mechanics
Limited (CHINESE CHARACTER)
(4) 100% interest in Jilin Engineering
Supervision Limited (CHINESE CHARACTER)
(5) 100% interest in CNPC Fushun Engineering
Supervision Limited (CHINESE CHARACTER)
(6) the entire assets in Northeast China Branch
Company, CNPC Engineering Design Limited
(CHINESE CHARACTER)
"PRC" the People's Republic of China
"HK$" Hong Kong dollars, the lawful currency of Hong
Kong Special Administrative Region, PRC
"RMB" Renminbi, the lawful currency of the PRC
By order of the Board
PETROCHINA COMPANY LIMITED
LI HUAIQI
Company Secretary
28 April 2008
Beijing, the PRC
As at the date of this announcement, the Board comprises Mr. Jiang Jiemin as the
Chairman; Mr. Duan Wende as the executive director; Mr. Zheng Hu, Mr. Zhou
Jiping, Mr. Wang Yilin, Mr. Zeng Yukang, Mr. Gong Huazhang and Mr. Jiang Fan as
non-executive directors; and Mr. Chee-Chen Tung, Mr. Liu Hongru and Mr. Franco
Bernabe 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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