On April 15, 2020, at the 13th Working Meeting in 2020 of Listed-Company Merger, Acquisition, and Reorganization Review Committee of China Securities Regulatory Commission, a conditional approval was granted to the project of asset acquisition and related fund raising through share issuance and payment in cash by Chongqing Three Gorges Water Conservancy and Electric Power Co., Ltd. (stock short name TGWC, stock code 600116)

As legal counsels exclusively on this transaction, the team led by Wang Wei, Branch Director and Partner of ZhongYin (Chongqing), and the team led by Yan Penghe, Managing Partner and Senior Partner of ZhongYin, jointly provided TGWC with a full range of high-quality and professional legal services regarding the project, including due diligence on underlying assets, correction of legal defects, demonstration on transaction plan, preparation of transaction documents and key terms, drafting of information disclosure documents, issuance of legal opinions, response to feedback from regulatory authorities, and so on. The members of the project team have won the respect and trust from the client by virtue of professional legal services and professionalism of diligence and dedication.

TGWC is the first listed power company in Chongqing, and mainly engages in power generation, power supply, power design, survey, installation and such other businesses. TGWC now has hydropower generating units in operation and under construction with a total installed capacity of 260,000 kilowatts. It has numerous hydropower stations and substations and is connected to Hubei and Chongqing power grids. It is an important power supplier in the Three Gorges Reservoir Area. The controlling shareholder of TGWC is China Yangtze Power Co., Ltd., and its actual controller is the State-owned Assets Supervision and Administration Commission of the State Council.

In this transaction, in response to the call of the State to deepen the mixed ownership reform of state-owned enterprises, and to support the economic development in the Three Gorges Reservoir Area, to further integrate the local power grids in Chongqing (that is, “Four-Grids Integration”), so as to strengthen the power supply capability, TGWC acquired 88.41% equity in Chongqing Yangtze Power United Energy Co., Ltd. and 100% equity in Chongqing Liangjiang Changxing Power Co., Ltd. through share issuance and payment in cash. Chongqing Yangtze Power United Energy Co., Ltd., one target company under this transaction, is one of the second pilot enterprises for mixed ownership reform approved by the Development and Reform Commission of the State Council, and Chongqing Liangjiang Changxing Power Co., Ltd., another target company under this transaction, is one of the first pilot enterprises for power-sales-side reform in Chongqing.

After the completion of this transaction, TGWC will become the only listed company mainly engaging in power distribution and sales within and under Three Gorges Group. The “Four-Grids Integration” may further advance the power system reform process, promote the formation of effective competition in the Chongqing region, motivate the vitality of market players, and contribute to the achievement of the goal of reducing power supply prices and optimizing power supply services. It will help implement thoroughly the central government's reform spirit of “regulating the middle and deregulating both ends” for the power system, explore the market-oriented reform model of separation of power generation, transmission, distribution, and sales, and while consolidating the achievements in the reform of Chongqing’s power system, creating a benchmark for deepening the reform of China’s power system.

The signing attorneys for this project are Wang Wei and Liu Tianqi. The team members also include Associates Wang Mengxiao, Xiong Yingjie, and Tang Qian, and Paralegals Weng Wenwen, Shao Muqing, Huang Fei, Lian Fang, etc.

One of the representing attorneys for the project Wang Mengxiao (first from right) and other attendees at the site of the review meeting of the China Securities Regulatory Commission