SDIC Power Holdings - Notice of the 2023 fourth EGM

SDIC Power Holdings CO., LTD.  

(GDR under the symbol: "SDIC")

NOTICE OF THE 2023 FOURTH EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that the 2023 Fourth Extraordinary General Meeting of SDIC Power Holdings CO., LTD. will be held at Room 207, No.147 Xizhimen Nanxiao Street, Xicheng District, Beijing, the PRC, on Thursday 27 July 2023 at 14:00 p.m., for the purpose of considering, and if thought fit, passing the following resolution.

ORDINARY RESOLUTION

1. To consider and approve the Proposal on Providing Guarantee for ICOL Company

The Board of Directors of SDIC Power Holdings CO., LTD.

July 10, 2023

The resolutions hereunder contain the English translation of the Chinese version of "Meeting materials for the 2023 Fourth Extraordinary General Meeting" as published on the website of the Shanghai Stock Exchange, and are provided for your reference only. In case of discrepancy between the Chinese version and the English version, the Chinese version shall prevail.

Proposal I

SDIC Power Holdings Co., Ltd.

Proposal on Providing Guarantee for ICOL Company

Dear shareholders and shareholder representatives:

SDIC Power Holdings Co., Ltd. (hereinafter referred to as the company) plans to provide a parent company guarantee of no more than £ 25 million for its subsidiary, Inch Cape Offshore Limited (hereinafter referred to as ICOL), 50 percent of whose shares are indirectly held by the company. The details are as follows:

1. An overview of the guarantee

The subsidiary, ICOL, of which the company indirectly holds 50 percent of the equity, is primarily responsible for the construction and operation of the Inch Cape offshore wind farms in the UK. Currently, the preliminary work is progressing as planned, and ICOL is locking engineering packages. After preliminary comparison and selection:

(1) ICOL has identified Vestas Celtic Wind Technology Limited (hereinafter referred to as Vestas) as the wind turbine supplier. Currently, ICOL and Vestas have signed a Preferred Supply Agreement (PSA). According to the contract negotiations, Vestas requests that the company provide a parent company guarantee with a limit of £ 5 million for the wind turbine procurement contract as a payment guarantee for its termination.

(2) ICOL plans to sign an agreement with Barclays Bank on issuing letters of credit with a limit of 40 million pounds, which will be used to support ICOL in providing performance guarantees for some suppliers during construction. According to the contract negotiations, Barclays Bank requires that the company provide a parent company guarantee with a limit of 20 million pounds for the agreement of issuing letters of credit.

Another shareholder of ICOL, Electricity Supply Board (hereinafter referred to as ESBII UK Limited), with 50 percent of its shares, will also provide parent company guarantees of £ 5 million and £ 20 million for ICOL on the aforementioned matters in accordance with their shareholding ratios.

2. The basic information of the guarantee holder

(1) The basic information of the guarantee holder

ICOL was established on February 17, 2010, with its registered address in Edinburgh: 5th Floor, 40 Princes Street, Edinburgh, EH2 2BY, Scotland, United Kingdom. As of May 2023, ICOL had a registered capital of £ 51.1 million and its main business was the production of renewable power (the development of offshore wind power).

As of December 31, 2022, ICOL's financial data was: it had total assets of £ 193.65 million, total liabilities of £ 171.91 million, and net assets of £ 21.74 million. Since ICOL is still in the development phase, there was no operating income in 2022, and the net profit was -1.73 million pounds.

As of May 31, 2023, ICOL's financial data was: it had total assets of £ 240.86 million, total liabilities of £ 220.03 million and net assets of £ 20.83 million; From January to May 2023, there was no operating income, and the net profit was -0.91 million pounds.

(2) Correlation between the guarantee holder and the company

ICOL is 100 percent owned by Inch Cape Offshore Holdings Limited (hereinafter referred to as ICOHL), and its shareholders are Red Rock Power Limited (with 50 percent of the shares) and ESBII UK Limited (with 50 percent of the shares). The details of ICOL's equity structure are shown in the following figure:

3. The main contents of the guarantee agreement

4. The necessity and rationality of the guarantee

According to the board of directors, the project of Inch Cape offshore wind farms owned by ICOL is of crucial importance in the implementation of the company's international strategic planning and the steady expansion of its overseas business. The wind turbine supply contract is a key capital construction point, and the aforementioned two parent company guarantees will ensure the smooth progress of the project's capital construction. In the matters of guarantee with Vestas, signing PSA is a necessary step for subsequent wind turbine procurement, which will guarantee the normal progress of the project; hence the risk of this guarantee is controllable. In the matters of guarantee with Barclays Bank, the letters of credit provided by Barclays Bank will be used by ICOL to provide guarantee for relevant suppliers, which frequently happens as a performance guarantee in promoting overseas business. The provision of this parent company guarantee is an important part in the follow-up construction of the project, so the risk of this guarantee is also controllable.

As of May 31, 2023, ICOL's total liabilities amounted to £ 220.03 million, including £ 179.66 million as the balance of shareholder loans. In the preparation and development of overseas projects, many shareholders use shareholder loans in place of some of the registered capital, so ICOL has a relatively low risk of overdue debt.

In summary, the interests of the company and shareholders will not be damaged in providing guarantee for ICOL.

5. Accumulated numbers of external guarantees and overdue guarantees

As of July 10, 2023, the company has an outstanding guarantee balance of 275.2675 million RMB for ICOL. The company had 3222.7913 million RMB as the balance of external guarantees (including guarantees provided for controlled subsidiaries) and 2947.5238 million RMB as the balance of guarantees provided for controlled subsidiaries (excluding this amount guaranteed), respectively accounting for 5.91 percent and 5.41 percent of the equity, based on the company's latest audit, attributable to the parent company.

As of July 10, 2023, the company has no overdue guarantees.

Therefore, it is requested to approve this guarantee, to authorize the Chairman or personnel authorized by the Chairman to modify, present, submit, sign, execute other legal documents related to this guarantee within the amount guaranteed, and to authorize the Chairman or personnel authorized by the Chairman to handle all other matters related to this guarantee.

The above proposal was approved at the 13th meeting of the 12th Board of Directors of the company on July 10, 2023, and is hereby submitted to all shareholders and shareholder representatives for deliberation.

Please deliberate on the above proposal.