OREANDA-NEWS. June 06, 2011. The Board is pleased to announce that, it approved the Split Arrangement of  Huajin Coking Coal, which is currently 50% owned by the Company and 50% owned by Shanxi Coking Coal Group. Pursuant to the Split Arrangement, Huajin Coking Coal will be split into two limited liability companies by way of split-off and both of the limited liability companies after the Split will be jointly held 50% by the Company and 50% by Shanxi Coking Coal Group, reported the press-centre of China Coal Energy Company.

After the Split, Huajin Coking Coal will continue to exist, while a new company, namely, Company holding Wangjialing mine (Chou), will be incorporated to hold the assets split from Huajin Coking Coal. The Board has also approved a draft Split Agreement to be entered into by Shanxi Coking Coal Group, Huajin Coking Coal, Company holding Wangjialing mine (Chou) and the Company, which contains the major terms of the Split of Huajin Coking Coal.
 
The Split will be conducted based on the current equity shareholdings held by the Company and Shanxi Coking Coal Group in Huajin Coking Coal. According to the Split Arrangement and draft Split Agreement, after the Split (i) Wangjialing Assets will be split from Huajin Coking Coal and will be held by Company holding Wangjialing mine (Chou); (ii) Huajin Coke Assets will continue to be held by Huajin Coking Coal; (iii) Huajin Coking Coal will continue to be held 50% by Shanxi Coking Coal Group and 50% by the Company; and (iv) Company holding Wangjialing mine (Chou) will be held 50% by Shanxi Coking Coal Group and 50% by the Company. No consideration will be paid for the Split.

This announcement is made pursuant to Rule 13.09(1) of the Listing Rules. As at the date of this announcement, as Shanxi Coking Coal Group is holding 50% equity interest of Huajin Coking Coal, it is a connected person of the Company under chapter 14A of the Listing Rules by virtue of being a substantial shareholder of a subsidiary of the Company, and the Split constitutes a connected transaction of the Company under Chapter 14A of the Listing Rules.

The Board of the Company has authorized the management of the Company to conduct all the matters in relation to the abovementioned Split as shareholder of the Huajin Coking Coal, and to execute the final Split Agreement after the relevant details of the draft Split Agreement can be finalized. The total amount of Huajin Coke Assets and Wangjialing Assets, and the respective registered capital of Huajin Coking Coal and Company holding Wangjialing mine (Chou) after the Split will be determined at the time when the Split Agreement is entered into. The Company will make further announcement if and when appropriate and comply with relevant requirements under Chapter 14 and 14A of the Listing Rules according to the applicable ratios of the Split.

After the Split, the Company intends to increase its capital contribution in Company holding Wangjialing mine (Chou) such that Company holding Wangjialing mine (Chou) will be held 51% by the Company and 49% by Shanxi Coking Coal Group. Shanxi Coking Coal Group also intends to increase its capital in Huajin Coking Coal such that Huajin Coking Coal will be held 49% by the Company and 51% by Shanxi Coking Coal Group. The Company will conduct the relevant approval procedures with respect to the aforementioned capital increase according to the applicable laws and regulations and separate capital increase agreements will be entered into when appropriate.