New York City, November 8, 2010 – China Hydroelectric Corp., an owner, developer and operator of small hydroelectric power projects in China announced that, on November 3, 2010, it entered into a definitive agreement to acquire a controlling interest in a total of 55.4 gross MW of operating installed capacity in Fujian province of the PRC.
This acquisition is the first phase of the previously announced Taiyu Projects acquisition for a controlling interest in seven operating hydroelectric power projects, representing a total of 114.4 MW.
This first phase of the Taiyu Projects acquisition consists of controlling interest in the following five operating projects: a 74 percent interest in the Jinwei project (16 MW); a 74 percent interest in the Jintang project (11.6 MW); a 55 percent interest in the Jinlong project (10 MW); a 100 percent interest in the Qianling project (13 MW); and a 100 percent interest in the Dongguan project (4.8 MW). These five projects represent a combined total of 55.4 gross MW of the total of 114.4 gross MW for the Taiyu Projects.
The definitive agreement provides for the company to acquire this first phase for a purchase price of $61.3 million. This acquisition, which is expected to be consummated shortly, is expected to be financed through cash on hand and bank financing. The consummation of the acquisition is subject to customary closing conditions, including, among other things, obtaining government approvals.
The company had announced the signing of the memorandum of understanding for this acquisition on February 14, 2010. This first phase of the acquisition, if consummated, will represent an addition of 55.4 MW of gross operating installed capacity, or 43.7 MW of net installed capacity, increasing the company’s total gross installed capacity to 548.8 MW, or 532.6 MW of net installed capacity.
The company continues to work towards finalizing the acquisition of the second phase of the Taiyu Projects for which the company has entered into memoranda of understanding.
As announced previously, the company has made down payments with respect to the Taiyu Projects 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.