China Holdings has acquired 100% of Hunan Zhangjiajie Chalinhe Electric Power Company and its Chalinhe Hydropower Plant in Hunan.
Hunan Zhangjiajie Chalinhe wholly owns the Chalinhe Hydropower Plant, consisting of a reservoir with a dam 95 meters high and a total land position of 90,064 square meters. Specifications for the dam consist of a dead water level of 77 meters, design flood level of 88.31 meters, check flood level of 92.81 meters and a total power generation capacity of 72,000 kW (4×1.8 ten thousand kW).
The first stage of the power station is to be completed in December 2007, when approximately the total installed power production capacity will be 54,000 kW. Annual power generation is expected to be 280 million kilowatt hours (kWh) based on 5,185 annual operation hours. The electricity sale price is RMB0.316/kWh with a sales contract with the China State Grid.
In addition, the Chalinhe Hydropower Station has full legal approved CDM rights and full legal rights for development of an additional 18,000 kW capacity to bring the total power generation capacity to 72,000 kW. The total expected current annual power generating capacity is currently 280,000,000 kWh with expected current annual revenues of approximately USD$12 million with expected net income of approximately US$11 million.
The acquisition transaction is expected to be completed following final legal due diligence of Hunan Zhangjiajie Chalinhe and details of the price should be announced then.
