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 March 2007
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- )
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PetroChina Company Limited (the "Registrant") is furnishing under the cover
of Form 6-K the Registrant's circular with respect to its disposal of 70%
interest in China National United Oil Corporation.
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 part of the contents of this
announcement.
(PETROCHINA COMPANY LIMITED LOGO)
PETROCHINA COMPANY LIMITED
(a joint stock company incorporated in the People's Republic of China
with limited liability)
(Stock Code: 857)
CONNECTED TRANSACTION
Disposal of 70% interest in China United Oil
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The Board wishes to announce that the Company entered into the Equity Transfer
Agreement with CNPC on 18 March 2007, pursuant to which, the Company will
dispose 70% of the equity interests in China United Oil to CNPC for a cash
consideration of approximately RMB1.01 billion.
As CNPC is a connected person of the Company and the highest applicable
percentage ratio exceeds 2.5%, the disposal constitutes a connected transaction
of the Company subject to reporting, announcement and independent shareholders'
approval requirements under Chapter 14A of the Listing Rules.
A circular containing, among other things, details of the Disposal, a letter
from the independent financial adviser, a recommendation by the Independent
Board Committee and a notice convening the annual general meeting of the Company
to approve, inter alia, the Disposal will be despatched to the Shareholders as
soon as practicable.
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1. BACKGROUND INFORMATION AND LISTING RULES IMPLICATION
On 18 March 2007, the Company entered into the Equity Transfer Agreement
with CNPC to dispose, subject to certain pre-conditions as set out below,
its entire equity interest in China United Oil, representing 70% of the
entire registered capital of China United Oil as at the date of this
announcement. Following the Disposal, the Company will cease to hold any
equity interest in China United Oil.
CNPC is a promoter and substantial shareholder of the Company, holding
approximately 88.21% of the issued share capital of the Company as at the
date of this announcement. CNPC is therefore a connected person of the
Company and accordingly the Disposal constitutes a connected transaction
under Chapter 14A of the Listing Rules.
As the highest applicable percentage ratio, being the revenue ratio, has
exceeded 2.5%, the Disposal constitutes a connected transaction subject to
the reporting, announcement and independent shareholders' approval
requirements under Chapter 14A of the Listing Rules. CNPC and its
associates (as defined under the Listing Rules) will be required to abstain
from voting in respect of the resolution on the Disposal.
A Board meeting was convened on 18 March 2007 to approve the Equity
Transfer Agreement. The Board approval is condition upon, inter alia, the
Independent Shareholders' approval. The Directors, including the
independent non-executive directors of the Company, are of the view that
the transaction is entered into after arm's length negotiations, the
consideration payable by CNPC and the other terms of the Disposal are fair
and reasonable and are in the interest of the Shareholders as a whole.
2. DESCRIPTION OF THE EQUITY TRANSFER AGREEMENT
Summary
Date of the Agreement: 18 March 2007
Parties: The Company and CNPC
Subject matter: Disposal of 70% of the equity interests
in China United Oil by the Company to
CNPC
Consideration: approximately RMB1.01 billion
Condition Precedent: Completion of the Equity Transfer
Agreement is subject to, among others:
(i) approvals from SASAC and other
regulatory authorities;
(ii) approval from the Independent
Shareholders;
(iii) requisite internal approvals from
the relevant authorities of CNPC;
and
(iv) the representations, warranties and
undertakings given by the Company in
relation to the Disposal being true,
accurate, complete and valid as at
the date of completion of the
transaction.
Completion: Unless otherwise agreed by the parties,
the closing of the Disposal will occur
within thirty business days from the date
on which all of the conditions as set
out above are satisfied. Full payment
will be made in cash on the date of
completion.
Basis of Consideration
The consideration is approximately RMB1.01 billion, which has been
determined after arm's length negotiations, with reference to and is
approximately equivalent to 70% of the appraisal value of China United Oil
as at 31 December 2006 of RMB1.44 billion. The above valuation was
conducted based on a cost-base method by Beijing China Enterprise Appraisal
Co., Ltd, a PRC qualified asset valuer which is independent of the Group.
The following financial information was derived from the audited accounts
of China United Oil prepared under PRC GAAP.
Year ended 31 December
2005 2006
(RMB$,000) (RMB$,000)
Net profit (loss) before taxes 417,691.04 447,391.95
Net profit (loss) after taxes 263,213.16 273,052.37
The net asset value of China United Oil as of 31 December 2006 was
approximately RMB1.275 million, based on which, the Group will be able to
recognize a gain of RMB117 million. The net proceeds of the Disposal are
intended to be used for further development of the Company's core
businesses.
3. REASONS AND BENEFITS FOR THE CONNECTED TRANSACTION
Although the Company holds 70% of the equity interests in China United Oil,
China United Oil is equity accounted for by the Company as the Company has
little or no control over the board and management of China United Oil. The
articles of association of China United Oil states that unanimous
shareholder approval is required for major corporate actions, including
increasing or decreasing its registered share capital, allocation of
profits and losses and changing its corporate structure. Furthermore,
representatives from the Company and Sinochem must be present for China
United Oil to convene any board meeting. As a result, despite holding 70%
of the equity interests in China United Oil, the Company has no actual
control over the running of China United Oil. As the Company is unable to
unilaterally decide on the strategy and direction of China United Oil,
China United Oil could in the future potentially grow and develop along a
direction that is inconsistent with the Company's overall strategy.
Furthermore, the Company has gradually been transferring its import and
export businesses of crude oil and refined oil to PetroChina International,
a wholly-owned subsidiary of the Company incorporated under the laws of PRC
in 2002. As the Company is able to exercise total control over PetroChina
International, the Company intends to conduct most of its import, export
and related international trade businesses through PetroChina International
in the future.
Based on the foregoing, the Directors, including the independent
non-executive Directors, are of the view that it is in the interests of the
shareholders of the Company that China United Oil is disposed of.
4. GENERAL INFORMATION ABOUT THE PARTIES, CHINA UNITED OIL AND MINORITY
SHAREHOLDER OF CHINA UNITED OIL
(a) Information regarding the Company
The Company, one of the largest companies in the PRC in terms of
sales, is engaged in a broad range of petroleum and natural
gas-related activities, including: (i) the exploration, development,
production and sale of crude oil and natural gas; (ii) the refining,
transportation, storage and marketing of crude oil and petroleum
products; (iii) the production and sale of basic petrochemical
products, derivative petrochemical products and other chemical
products; and (iv) the transmission of natural gas, crude oil and
refined products, and the sale of natural gas.
(b) Information regarding China United Oil
China United Oil, a company with limited liability incorporated in the
PRC, has the following principal businesses: (i) the import, export
and sale of crude oil and refined oil; (ii) approved offshore futures
business; (iii) sale of petrochemical products; and (iv) sale of
natural gas, naphtha, wax oil, fuel oil and mineral products.
(c) Information regarding CNPC
CNPC, a state-owned enterprise incorporated under the laws of the PRC,
and the controlling shareholder of the Company, is principally engaged
in crude oil and natural gas exploration and production business
activities outside the PRC and limited petrochemical production and
retail of refined oil productions.
(d) Information regarding Sinochem
The other shareholder of China United Oil is Sinochem, which
beneficially owns the remaining 30% equity interests in China United
Oil as at the date of this announcement.
5. OTHER INFORMATION
An Independent Board Committee comprising Messrs Chee-Chen Tung, Liu Hongru
and Franco Bernabe, was established on 18 March 2007 for the purpose of
reviewing and advising Independent Shareholders in respect of the Disposal.
ICEA Capital Limited has been appointed as the Independent Financial
Adviser.
A circular containing, among other things, details of the Disposal, a
letter from the independent financial adviser, a recommendation by the
Independent Board Committee and a notice convening the annual general
meeting of the Company to approve, inter alia, the Disposal will be
despatched to the Shareholders as soon as practicable.
6. DEFINITION
"Board" the board of the Directors
"China United Oil" (China National United Oil Corporation*),
a company incorporated under the laws of
the PRC, which is 70% owned by the Company
and 30% owned by Sinochem as at the date of
this announcement
"CNPC" (China National Petroleum Corporation*), a
state-owned enterprise incorporated under
the laws of the PRC, and the controlling
shareholder of the Company
"Directors" the directors of the Company
"Disposal" the transaction contemplated under the Equity
Transfer Agreement
"Equity Transfer Agreement" the equity transaction agreement entered into
by the Company and CNPC dated 18 March 2007
"Group" the Company and its subsidiaries
"Independent Board the independent committee of the Board,
Committee" comprising Messrs Chee-Chen Tung, Liu Hongru
and Franco Bernabe, established on 18 March
2007 for the purpose of reviewing and advising
Independent Shareholders in respect of the
transaction contemplated under the Equity
Transfer Agreement
"Independent Shareholder(s)" the shareholder(s) of the Company other
than CNPC and its associates, as defined under
the Listing Rules
"Listing Rules" the Rules Governing the Listing of Securities
on the Stock Exchange
"the Company" (Petrochina Company Limited*), a joint
stock company limited by shares incorporated
in the PRC on 5 November 1999 under laws of
the PRC, and listed on the Stock Exchange with
American Depository Shares listed on the
New York Stock Exchange
"PetroChina International" (Petrochina International Co., Ltd*), a wholly
-owned subsidiary of the Company, incorporated
under the laws of the PRC
"PRC" the People's Republic of China
"SASAC" (State-owned Assets Supervision and
Administration Commission of the State
Council*)
"Shareholder(s)" the holder(s) of shares of the Company
"Sinochem" Sinochem Corporation, a state-owned enterprise
incorporated under the laws of the PRC
"Stock Exchange" The Stock Exchange of Hong Kong Limited
By Order of the Board
PetroChina Company Limited
Li Huaiqi
Secretary to the Board
Beijing, PRC, 18 March 2007
As at the date of this announcement, our Chairman is Mr. Chen Geng; our Vice
Chairman is Mr. Jiang Jiemin; our Executive Director is Mr. Duan Wende; our
Non-executive Directors are Messrs Zheng Hu, Zhou Jiping, Wang Yilin, Zeng
Yukang, Gong Huazhang and Jiang Fan; and our Independent Non-executive Directors
are Messrs Chee-Chen Tung, Liu Hongru and Franco Bernabe.
* For identification purposes only.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
PetroChina Company Limited
Dated: March 19, 2007 By: /s/ Li Huaiqi
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Name: Li Huaiqi
Title: Company Secretary