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Petrochina Co Ltd · SC 13E3/A · Jilin Chemical Industrial Co Ltd · On 12/23/05 · EX-99.(C).5

Filed On 12/23/05, 6:01am ET   ·   Accession Number 1145549-5-2156   ·   SEC File 5-50686

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  As Of                Filer                Filing    For/On/As Docs:Size              Issuer               Agent

12/23/05  Petrochina Co Ltd                 SC 13E3/A              8:1.9M Jilin Chemical Industrial Co Ltd  RR DONN..FundSuiteArc/FA

Amendment to Tender-Offer Statement — Going-Private Transaction   —   Schedule 13E-3
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: SC 13E3/A   Petrochina Sc 13E-3/A                               HTML    106K 
 2: EX-99.(C).1  EX-99.(C).1 Update on Potential Acquisition of     HTML    170K 
                          the Minority Interests in Jilin Chemical               
 3: EX-99.(C).2  EX-99.(C).2 Project 517 - Preliminary Transaction  HTML     19K 
                          & Valuation Considerations, Dated May                  
                          23, 2005                                               
 4: EX-99.(C).3  EX-99.(C).3 Project Chunhui, Dated June 23, 2005   HTML    285K 
 5: EX-99.(C).4  EX-99.(C).4 Data Book - Interim Update of Trading  HTML    142K 
                          & Premium Information, Dated August 3,                 
                          2005                                                   
 6: EX-99.(C).5  EX-99.(C).5 Updated Executive Timetable and Data   HTML    225K 
                          Book, Dated October 14, 2005                           
 7: EX-99.(C).6  EX-99.(C).6 Data Book, Dated October 25, 2005      HTML     88K 
 8: EX-99.(C).7  EX-99.(C).7 Data Book, Dated October 26, 2005      HTML    108K 


EX-99.(C).5   —   EX-99.(C).5 Updated Executive Timetable and Data Book, Dated October 14, 2005
Exhibit Table of Contents

Page (sequential) | (alphabetic) Top
 
11st Page   -   Filing Submission
"Table of Contents
"Updated Executive Timetable
"Latest Data Book
"Request List for Updating Files
"Documents That Company Must Prepare And Must Actively Collaborate in Preparing Before 1st Joint Announcement
"List of Documents

This exhibit is an HTML Document rendered as filed.  [ Alternative Formats ]



  exv99wxcyw5  

Table of Contents

Exhibit (c)(5)

REQUESTED BY HONG KONG SECURITIES AND FUTURES COMMISSION
THE FINANCIAL AND OTHER INFORMATION CONTAINED IN THE PRESENTATION WAS EXTRACTED FROM PUBLICLY AVAILABLE INFORMATION AND WAS NOT INTENDED TO BE USED IN THE COMPOSITE DOCUMENT IN RELATION TO THE H SHARE OFFER AND WAS THEREFORE NOT PREPARED WITH A VIEW TO ENSURING COMPLIANCE WITH RULE 10 OF THE TAKEOVERS CODE.

 



Table of Contents

Confidential
Presentation to:
Project Chunhui
UPDATED EXECUTIVE TIMETABLE AND DATA BOOK
October 14, 2005
(CITIGROUP LOGO)

 



 

Table of Contents
             
    1   UPDATED EXECUTIVE TIMETABLE
 
           
    2   LATEST DATA BOOK
 
           
    3   REQUEST LIST FOR UPDATING FILES
 
      A.   Documents That Company Must Prepare And Must Actively Collaborate in Preparing Before 1st Joint Announcement
 
      B.   List of Documents
(CITIGROUP LOGO)

 



Table of Contents

Executive Summary
    Under the leadership of the company, the advisory group has made significant progress in structuring and identifying key execution risks in the proposed transaction which will be yet another landmark transaction for X
 
    On regulatory front, we summarize below the major accomplishments and key next steps to refresh our memory and focus our attention:
Regulatory Issues
Already Resolved
                     
    PRC       Hong Kong       US
  Submission of CSRC application     Obtain 90% acceptance level waiver from SFC, and lower it to 66.7%     SEC has stated that they do not object to the different treatment of the A shares and H shares
  Form and timing of 1st and 2nd Announcements                
  X and Y hold Board Meeting and sign on Joint Offer Announcement procedure and timetable     SFC willing to pre-clear the Joint Offer Announcements        
Regulatory Issues Outstanding – must be resolved before 1st Joint Offer - Announcement
                     
  CSRC approval     Confirm with SFC on X’s associate disclosing its shareholding and trading of X’s A shares     Resolve 30-day shareholding analysis with SEC
 
 
        submit formal application letter for waiver from 90% acceptance        
  In this book, we also refresh the execution timetable and data book for you, assuming the offers will involve only cash consideration
(CITIGROUP LOGO)

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Table of Contents

Executive Summary (Cont’d)
    Given the complexity of the relevant regulatory issues, controlling the timing of critical path tasks — especially documentation, will be critical
    Based purely on publicly available data, the currently identifiable US holding of the H shares is around 6.5%. Therefore it is difficult to rule out the possibility of the transaction being classified as Tier II
 
    An all cash offer and Tier II status means we will need to satisfy US 13e-3 requirements
 
    This would require more detailed disclosure in the offer document, including disclosure about the disclosure of any valuation related reports or materials submitted by financial or other third party advisers
 
    Estimate 3 – 4 additional weeks required for preparation of and drafting of additional 13e-3 related information
 
    Shorter time between first and second Joint Offer Announcements if PRC regulators sign off the relevant applications shortly after the 1st Joint Offer Announcement would reduce time available and increase pressure for timely completion of documentation
    In better managing and pre-empting the timing implications, the advisory group recommends:
    X must proceed under the assumption of Tier II status and 13e-3 disclosure requirements
 
    Freshfields must start drafting the offering circular immediately
 
    Shearman & Sterling to add U.S. disclosure to offering circular draft
 
    Appointment of Specialist Agency in identifying shareholding base (requires payment of small fee). Citigroup also appointed Specialist Agency to process shareholding identification in recent Hong Kong privatization cases in order to understand the operation procedure
 
    X to confirm internal team has sufficient resources to manage heavy workload
(CITIGROUP LOGO)

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Table of Contents

1   UPDATED EXECUTIVE TIMETABLE
(CITIGROUP LOGO)

 



Table of Contents

Overall Executive Timetable
     (FLOW CHART)
Note: Tier 2 is assumed for this timetable.
(1)   The Shenzhen Exchange requires A shares to be suspended on announcement date. Thus, it shall resume trading one day later than H shares and ADR. Advisors beleive that it’s very possible that CSRC will agree on later trading resumption of A shares.
(CITIGROUP LOGO)

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Table of Contents

Stage 1: Before 1st Joint Offer Announcement
     Note: “Days”refer to both business days and non-business days; Ad refers to “Announcement Date”
                                         
Date       X/Y       King & Wood       Freshfields       Shearman & Sterling       FAs
Must be resolved
before 1st Joint
Offer
Announcement
    Start planning of procurement of the financial resources for the two offers     Start drafting applications to CSRC and SAFE for:     Finalize 1st Joint
Offer Announcement
    Confirm SEC’s view on the 30-day shareholding analysis and request for No Action Letter     Coordinate
documentation preparation
 
             
• Acquisition Report
    Finalize agenda of board of directors                
 
             
• Remittance of HK$/ US$, if foreign currency reserves insufficient to satisfy the H Share offer (assuming all-cash consideration)
                       
 
    prepare certificates for various applications (Please refer to Section 3)                     Confirm NYSE acceptance of share suspension period     Work with senior management of X to determine the final valuation/indicative price
 
 
    Determine whether to appoint Specialist Agency. Anonymous investigation of Shareholding status                     Finalize Schedule 13D/A     Galaxy Securities to
finalize FA Report
regarding general offer
for A shares
 
            Provide Legal Opinion Letter stating authenticity, accuracy and integrality of the Offer Report             Finalize 1st Joint Offer Announcement     Finalize 1st Joint Offer Announcement
 
            Confirm CSRC accepts longer H
share offer period
            Start drafting Tier II offer document (please refer to Section 3B for document checklist applied to Tier-II status)     Appoint Specialist Agency to assist in processing HK stipulatory shares analysis
 
    Finalize 13-D and Form TO-C (only a cover letter to the Joint Offer Announcement)                                
 
            Confirm CSRC’s position on all
legal issues within its regulatory
authority
                       
 
    Instruct the lawyers to prepare shareholders’ circular and documentation required by US                                
 
            Finalize 1st Joint Offer Announcement with Freshfields and Shearman & Sterling                        
 
            Finalize agenda of board of directors                        
(CITIGROUP LOGO)

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Table of Contents

Stage 1: Before 1st Joint Offer Announcement (Continued)
                                     
Date       X/Y   King & Wood   Freshfields   Shearman & Sterling   FAs
AD–13   Obtain approval in principle from CSRC and SEC
 
                                   
AD-12
    Circulate BoD meeting notification         Circulate revised 1st Joint Offer Announcement             Assist to prepare press communication materials
 
                                   
 
    X circulates BoD meeting notification and set the meeting subject as “Discussion about Major Commercial Issues” or other topics not related to the nature of Project Chunhui                         Coordinate and supervise documentation preparation of each group
 
                                 
 
                                   
AD-9   Finalize 1st Joint Offer Announcement by all parties
 
                                   
AD-7
    X to pre-submit 1st Joint Offer Announcement (authorized by senior management of X). The move is to allow CSRC and SFC to have fully communicate about this precedent transaction                 Implement revised Schedule 13D     Coordination on reply to HKSE regarding 1st Joint Offer Announcement and revise the draft as required
 
                                   
 
    Provide SFC application fees to Freshfields                            
 
                                   
AD-4
    BoD of X receives board meeting materials                            
 
                                   
 
    Focus on trading status of X and Y; suspend share X and Y trading at any time if there’s any abnormal movements                            
(CITIGROUP LOGO)

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Table of Contents

Stage 1: Before 1st Joint Offer Announcement (Continued)
                                         
Data       X/Y       King & Wood       Freshfields       Shearman & Sterling       FAs
AD-3
    Provide Citigroup with capital adequacy letter                        
 
                                       
AD-2
      X is scheduled to have the board meeting at 9pm to approve :     submit applications to CSRC and SAFE for:     After Chairman of Y’s BOD has signed the offer, formally submit the first joint offer announcement and the application for waiver from Acquisition Rule 2.2 (c)     Finalize Schedule TO-C and submit the first joint offer announcement for clearance     Continue to coordinate with and supervise all parties to prepare documentations and answer questions from SFC regarding the first joint offer announcement
 
     
• The provisions of the offer
     
• Acquisition report and the summary of the acquisition report
           
 
     
• To publish the first joint offer announcement
                       
 
     
• To set up and authorize a sub-committee in the board to take charge of this project
• Schedule 13D (for filing)
     
• Remittance of HK$/ US$, if foreign currency reserves insufficient to satisfy the H-Share offer, assuming all shareholders choose cash alternatives
                 
 
    After getting the approval from the BOD of X and the closing of the market, Chairman of X’s BOD will notify Chairman of Y’s BOD, trying to get his approval and signature for the first joint offer announcement (if Chairman of Y’s BOD does not approve the first joint offer announcement, X can make the announcement on its own) and ask Y to coordinate with X for the equity analysis work as required by the statutory procedures in HK                              
 
    Apply for suspension of trading of Share X and Y in all exchanges                                
 
    X to ensure X, its associates and its concerted parties have no dealings in Y shares over the past six months and restrict them from dealings in Y shares going forward     Formally submit the draft of the first joint offer announcement and other documents to SFC, SEHK, Shenzhen Stock Exchange and the local branch of CSRC, where Y is located.
 
    Make warranty deposit at authorized security and clearance institution                                
(CITIGROUP LOGO)

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Table of Contents

Stage 1: Before 1st Joint Offer Announcement (Continued)
                     
  Date   X/Y   King & Wood   Freshfields   Shearman & Sterling   FAs
AD-1
                  Finalize the communication
     material with the media
 
  Publish 1st Joint Offer
     Announcement in the
     evening (published
               
         in both Mainland, Hong Kong and US)        Receive the formal approval for the first joint offer announcement
AD
                   
 
  X and Y hold a joint press conference
     (further discussion is needed on the
     necessity of the conference)
               
 
AD+1
  Y resume trading of H Share and ADR           Before resuming
     trading, file
     Schedule 13D/A
     with SEC
  Coordinate work regarding documents
     post the first joint offer announcement,
     media and supervisory agencies
 
 
              Submit the first
     joint offer
     announcement
     and TO-C to SEC
   
(CITIGROUP LOGO)

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Table of Contents

Stage 2: Before 2nd Joint Offer Announcement
                                                                         
Date           X/Y           King & Wood   Freshfields   Shearman & Sterling   FAs
AD+2     4     Resume trading of Y’s A share (1)                 4     To start drafting     4     To assist in preparing and drafting     4     To start drafting
 
    4     X&Y to prepare documents per appendices B and C                   Composite offer
circular
            Composite offer
circular
            Composite offer
circular
 
    4     Y begins drafting Schedule 14D-9                   2nd Joint Offer
Announcement
            2nd Joint Offer
Announcement
            2nd Joint Offer
Announcement
 
    4     Y appoints IFAs (both HK and PRC)                                                      
 
    4     Y appoints FAs and legal counsels for HK, US and PRC ( as suggested, but not as required by law)                                         Other offer documents (please see Section 3 for list of documents)                
 
    4     Commence implementation of statutory procedures to ascertain U.S. shareholder baseo expected for two weekso                                                            
 
                                                                       
AD+3     4     Y to meet with its advisor group     4     To start drafting 2nd Joint Offer Announcement to SEC/ SEHK/ SFC for clearance     4     IFAs start drafting their opinions
 
                                                                       
AD+4
    4     Y to have board meetings                                                            
 
    4     Offer for approval in principle                                                            
 
    4     Authorize a sub-committee to take charge of the project                                                            
 
                                                                       
AD+8                             4     Finalize Draft Composite Circular and submit it SFC for approval                                
 
                                                                       
AD+10                                                             4     IFAs to circulate draft IFA letters
 
(1)   Shenzhen Stock Exchange requires to suspend trading of A share on the date of the offer announcement, therefore one day later than the resumption of trading for H Share and ADR. Advisors believe CSRC is very likely to approve postponing the resumption of A share trading for a little bit.
(CITIGROUP LOGO)
  8

 



Table of Contents

Stage 2: Before 2nd Joint Offer Announcement (Continued)
                                     
Date       X/Y   King & Wood       Freshfields       Shearman & Sterling       FAs
AD+11
                      4   Work with expert advisors to confirm on Tier I /II status (on which day to confirm the ownership by US residents depends on the result of the current discussion with SEC)        
 
                                   
AD+15
              4   To finalize the second
joint offer announcement
  4   Assuming a Tier II offer is made, finalize other   4   IFAs to finalize draft IFA letters and submit to regulators for pre-clearance
 
              4   To submit draft 2nd Joint
Offer Announcement
               
 
                                   
AD+23
              4   Obtain the approval from SFC for the second joint offer announcement and composite offer documents                
 
                                   
AD+25
  4   Obtain approvals from SAFE on remittance of HK$/ US$                            
 
  4   Obtain approvals from
CSRC on the acquisition
offer of A shares
                           
(CITIGROUP LOGO)
  9

 



Table of Contents

Stage 2: Before 2nd Joint Offer Announcement (Continued)
                             
Date   X/Y       King & Wood       Freshfields   Shearman & Sterling   FAs
AD+26       4   After satisfying pre-conditions, publish 2nd Joint Offer Announcement (published in both Mainland, Hong Kong and US) and the acquisition report(published in China)        
 
                           
        4   Offer conditions:        
 
                           
 
            H-Share conditions: 66.7% acceptance; disinterested shareholders’ approval on delisting            
 
                           
 
            A-Share conditions: take H-Share conditions as conditions            
 
                           
        4   Posting of HK composite offer document        
 
                           
        4   If making a TierII offer, publish the overview of the announcement and file Form TO (and Schedule 13E-3 (if applicable)) with SEC and submit copies to Y        
 
                           
        4   Y registers Schedule 14D-9 with SEC        
 
                           
        4   45 day notice period for SGM commences        
 
                           
        4   H-Share offer period commences        
 
                           
        4   A-Share offer period commences        
 
                           
AD+27       4   Make 3 announcements consecutively regarding A shares offer (Same as the 2nd Joint Offer Announcement)        
 
                           
        4   During the share offer period, X should file the announcement with Shenzhen Stock Exchange on the volume of accepted share and that of withdrew shares        
(CITIGROUP LOGO)

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Table of Contents

Stage 2: Before 2nd Joint Offer Announcement (Continued)
                                                 
Date           X/ Y               King & Wood   Freshfields           Shearman & Sterling   FAs
AD+40 to
AD+70
(approximately)
                                    4     Reply to SEC suggestion regarding TO plan/ 13E-3 plan, and revise the document if need be    
 
                                               
AD+68                     4     Draft and submit draft Joint Announcement of SGM results for clearance to SEHK/ SFC
 
                                               
AD+71     4     Suspension of trading of shares of Y pending results of SGM                                
      4     Y holds shareholder meeting to approve for H shares delisting                                
 
            X and its associated persons not permitted to vote for motion to delist                                
 
            Delisting motion requires approval of at least 75% of disinterested votes cast in person or by proxy                                
 
            Votes from objectors must not be more than 10% of the total disinterested votes cast                                
(CITIGROUP LOGO)

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Table of Contents

Stage 3: After 2nd Joint Offer Announcement
                     
Date   X/ Y   King & Wood   Freshfields   Shearman & Sterling   FAs
AD+72   4   Announcement of HK SGM results
          If motion to delist is passed, then H share offer becomes unconditional (if other conditions such as 66.7% acceptances condition satisfied)
 
          When the offer becomes unconditional, it will remain open for 28for acceptance by shareholders (the new requirement raised by SFC after waivering the 90% acceptance level)
 
          Send notice to SEHK in respect of expected date of delisting
 
          Announce the level of acceptance and declare offer unconditional or extend offer if other conditions not satisfied
 
 
        If H share offer fails to become unconditional, Y’s shareholders who have indicated to accept the offer can revoke their acceptance
AD+86   4   Close of A-Share offer (opened for 60 days by this date)
 
AD+87-   4   X authorizes Galaxy Securities to deposit all the fund need for A-share offer(incl. Taxes and fees) to China Securities Depositary and Clearing Corporation
 
AD+89   4   X applies to Shenzhen Stock Exchange for stock transfer
 
    4   Submit written report about the offer to CSRC, the agency of CSRC and the stock exchange, inform Y and make necessary announcement within 3 working days after the closing date of the offer.
 
    4   Suspension of Y shares
 
AD+96   4   The last day for consideration payment to Y’s H shareholders
 
    4   Cancellation of the listing status of Y’s H shares (A-share delisting timing and scheme is subject to CSRC’s opinion on delisting procedure)
 
AD+100   4   Completion of H-share offer(Assume AD+72 H share offer is unconditional, and at least 28 days after completing H-share offer )
(CITIGROUP LOGO)

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Table of Contents

2   LATEST DATA BOOK
(CITIGROUP LOGO)

 



Table of Contents

A-Share Turnover Information
     
(TRADING VOLUME GRAPH)
  (CUMULATIVE VOLUME GRAPH)
Over 50% of Y’s A shares have traded at or below RMB 4.50 in the last 48 days.
Over 80% of Y’s A shares have traded at or below RMB 4.80 in the last 48 days.
                                                                 
    Turnover Information  
    Last 15 Days     Last 30 Days     Last 45 Days   Last 48 Days  
    Trading             Trading             Trading             Trading        
    Volume     % of Total     Volume     % of Total     Volume     % of Total     Volume     % of Total  
Price   (MM)     A- Shares     (MM)     A- Shares     (MM)     A- Shares     (MM)     A- Shares  
< 3.90
                            0.0       0.0 %     0.0       0.0 %
3.90 - 4.04
                            12.8       6.4 %     18.3       9.2 %
4.05 - 4.19
    0.0       0.0 %     0.0       0.0 %     20.9       10.4 %     29.9       15.0 %
4.20 - 4.34
    3.9       2.0 %     3.9       2.0 %     27.9       13.9 %     39.2       19.6 %
4.35 - 4.49
    6.7       3.4 %     13.4       6.7 %     24.4       12.2 %     24.4       12.2 %
4.50 - 4.64
    13.5       6.8 %     35.0       17.5 %     35.0       17.5 %     35.0       17.5 %
4.65 - 4.79
    3.3       1.6 %     23.6       11.8 %     23.6       11.8 %     23.6       11.8 %
4.80 - 4.94
                22.1       11.1 %     22.1       11.1 %     22.1       11.1 %
4.95 - 5.10
                7.4       3.7 %     7.4       3.7 %     7.4       3.7 %
> 5.10
                                               
Note: The days shown above are active trading days. Shares equivalent to the total number of A shares were traded in the last 48 days. Information as of October 12, 2005.
(CITIGROUP LOGO)

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Table of Contents

H-Share Turnover Information
     
(TRADING VOLUME GRAPH)
  (CUMULATIVE VOLUME GRAPH)
67.67% of Y’s H shares have traded at or below HK$ 2.55 in the last 41 days.
Close to 90% of Y’s H shares have traded at or below HK$ 2.70 in the last 41 days.
                                                                 
    Turnover Information  
Price   Last 10 Days     Last 20 Days     Last 30 Days Last 41 Days             
    Trading         Trading         Trading         Trading      
    Volume     % of Total     Volume       % of Total   Volume       % of Total   Volume     % of Total  
    (MM)     H- Shares       (MM)     H- Shares     (MM)     H- Shares     (MM)   H- Shares  
< 2.15
          0.0 %                             0.9       0.1 %
2.15 - 2.19
          0.0 %                             25.2       2.6 %
2.20 - 2.24
    0.1       0.0 %     6.3       0.7 %     8.9       0.9 %     32.9       3.4 %
2.25 - 2.29
    11.4       1.2 %     53.7       5.6 %     61.4       6.4 %     61.4       6.4 %
2.30 - 2.34
    18.3       1.9 %     31.5       3.3 %     36.8       3.8 %     36.8       3.8 %
2.35 - 2.39
    17.4       1.8 %     49.6       5.1 %     82.0       8.5 %     82.0       8.5 %
2.40 - 2.44
    6.1       0.6 %     79.6       8.2 %     149.5       15.5 %     149.5       15.5 %
2.45 - 2.49
                9.7       1.0 %     81.2       8.4 %     81.2       8.4 %
2.50 - 2.54
                            186.5       19.3 %     186.5       19.3 %
2.55 - 2.59
                            44.0       4.6 %     44.0       4.6 %
2.60 - 2.64
                            81.7       8.5 %     81.7       8.5 %
2.65 - 2.69
                            176.2       18.3 %     176.2       18.3 %
2.70 - 2.75
                            6.8       0.7 %     6.8       0.7 %
> 2.75
                                               
Note: The days shown above are active trading days. Shares equivalent to the total number of H shares were traded in the last 41 days. Information as of October 12, 2005.
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Premium Statistics– H Shares
Trading Data of Y’s H Shares (Premium versus Reference Price)
                                                                         
    Stock             52-Week        
    Price as of             Performance     Average Closing Price  
    10/12/2005     IPO Price     High     Low     10 days     20 days     30 days     90 days     6 months  
(HK$)
    2.23       1.59       3.13       1.38       2.35       2.40       2.33       2.06       1.94  
Reference
                                                                       
Price
                                                                       
2.23
    0.0 %     40.0 %     -28.8 %     61.2 %     -5.1 %     -7.1 %     -4.6 %     8.2 %     14.5 %
2.28
    2.2 %     43.2 %     -27.2 %     64.9 %     -3.0 %     -5.0 %     -2.5 %     10.6 %     17.0 %
2.33
    4.5 %     46.3 %     -25.6 %     68.5 %     -0.9 %     -2.9 %     -0.4 %     13.0 %     19.6 %
2.38
    6.7 %     49.5 %     -24.0 %     72.1 %     1.3 %     -0.8 %     1.8 %     15.5 %     22.2 %
2.43
    9.0 %     52.6 %     -22.4 %     75.7 %     3.4 %     1.3 %     3.9 %     17.9 %     24.7 %
2.48
    11.2 %     55.8 %     -20.8 %     79.3 %     5.5 %     3.3 %     6.1 %     20.3 %     27.3 %
2.53
    13.5 %     58.9 %     -19.2 %     83.0 %     7.7 %     5.4 %     8.2 %     22.8 %     29.9 %
2.58
    15.7 %     62.1 %     -17.6 %     86.6 %     9.8 %     7.5 %     10.4 %     25.2 %     32.5 %
2.63
    18.0 %     65.2 %     -16.0 %     90.2 %     11.9 %     9.6 %     12.5 %     27.6 %     35.0 %
2.68
    20.2 %     68.3 %     -14.4 %     93.8 %     14.1 %     11.7 %     14.6 %     30.1 %     37.6 %
2.73
    22.5 %     71.5 %     -12.8 %     97.5 %     16.2 %     13.8 %     16.8 %     32.5 %     40.2 %
Source: Bloomberg
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Premium Statistics — A Shares
Trading Data of Y’s A Shares (Premium versus Reference Price)
                                                                         
    Stock           52-Week      
    Price as of   IPO   Performance   Average Closing Price
    10/12/2005   Price   High   Low   10 days   20 days   30 days   90 days   6 months
     
(RMB)
    4.5       3.5       6.54       2.34       4.52       4.57       4.41       3.66       3.66  
Reference Price
                                                                       
     
4.19
    -7.0 %     19.6 %     -36.0 %     78.9 %     -7.5 %     -8.5 %     -5.2 %     14.5 %     14.5 %
4.28
    -4.9 %     22.3 %     -34.6 %     82.9 %     -5.4 %     -6.4 %     -3.1 %     17.0 %     17.0 %
4.37
    -2.8 %     25.0 %     -33.1 %     86.9 %     -3.3 %     -4.4 %     -0.9 %     19.6 %     19.6 %
4.47
    -0.7 %     27.6 %     -31.7 %     90.9 %     -1.2 %     -2.3 %     1.2 %     22.2 %     22.2 %
4.56
    1.4 %     30.3 %     -30.3 %     94.9 %     0.8 %     -0.3 %     3.3 %     24.7 %     24.7 %
4.66
    3.5 %     33.0 %     -28.8 %     99.0 %     2.9 %     1.8 %     5.5 %     27.3 %     27.3 %
4.75
    5.5 %     35.7 %     -27.4 %     103.0 %     5.0 %     3.8 %     7.6 %     29.9 %     29.9 %
4.84
    7.6 %     38.4 %     -25.9 %     107.0 %     7.1 %     5.9 %     9.7 %     32.5 %     32.5 %
4.94
    9.7 %     41.1 %     -24.5 %     111.0 %     9.2 %     7.9 %     11.8 %     35.0 %     35.0 %
5.03
    11.8 %     43.8 %     -23.1 %     115.0 %     11.2 %     10.0 %     14.0 %     37.6 %     37.6 %
5.13
    13.9 %     46.4 %     -21.6 %     119.0 %     13.3 %     12.1 %     16.1 %     40.2 %     40.2 %
      
Source: Bloomberg   (CITIGROUP LOGO)

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Traded Petrochemical Companies
Information of Traded Petrochemical Companies (as of Oct 12, 2005)
                                                         
Valuation Multiples   Share     Market     Price / EPS     Firm     Firm Value / EBITDA  
(Dollar in Millions, Except Stock Price)   Price     Cap(a)     2005E     2006E     Value(b)     2005E     2006E  
          (in US$MM)                 (in US$MM)              
 
Y (A Share)
  RMB 4.50   $ 1,721       71.4 x     21.0 x   $ 2,213       11.9 x     9.3 x
 
                                                       
Chinese Cos — A shares
                                                       
Sinopec Shanghai Petrochemical Co Ltd
  RMB 3.58     2,929       7.7 x     8.3 x     3,665       4.8 x     5.5 x
China Petroleum and Chemical (Sinopec)
    4.07     42,425       9.1       8.5       65,179       5.2       4.8  
             
 
          Mean
    8.4 x     8.4 x             5.0 x     5.1 x
             
Y (H Share)
  HK$2.23   $ 1,721       36.8 x     10.8 x   $ 2,234       12.0 x     9.4 x
 
                                                       
Chinese Cos — H shares
                                                       
Sinopec Shanghai Petrochemical Co Ltd
  HK$2.58     2,929       5.8 x     6.2 x     3,696       4.9 x     5.5 x
Sinopec Zhenhai Refining & Chemical Co
    8.70     2,830       9.3       7.7       2,657       4.5       4.0  
PetroChina
    6.15     141,903       7.4       7.3       150,129       4.4       4.2  
China Petroleum and Chemical (Sinopec)
    3.35     42,425       7.2       6.7       66,149       4.9       4.5  
             
 
          Mean
    7.4 x     7.0 x             4.6 x     4.6 x
 
          Median
    7.3       7.0               4.7       4.4  
             
 
                                                       
Other Asian Cos
                                                       
Formosa Chemicals & Fibre Corp
  TW$51.00   $ 8,196       6.7       7.9 x   $ 9,809       9.6 x     9.9 x
Formosa Petrochemicals Corp
  TW$61.10     16,404       9.0       9.0       20,934       9.1       8.9  
National Petrochemical PCL
  THB 141.00     1,067       10.6       10.4       1,110       7.0       7.0  
PTT Public Co Ltd
  THB 238.00     16,254       8.7       8.2       20,843       7.6       7.0  
S Oil Corporation
  KRW 80,500     8,688       7.7       8.1       9,832       8.2       9.1  
Showa Shell Sekiyu KK
  JPY 1,475.00     4,862       11.1     NA       5,703       6.5       7.8  
Singapore Petroleum Company
  SGD 5.75     1,700       7.7       7.3       2,020       8.6       6.3  
TonenGeneral Sekiyu KK
  JPY 1,271.00     6,587       27.9     NA       7,190       10.7       10.7  
             
 
          Mean
    11.2 x     6.4 x             8.4 x     8.3 x
 
          Median
    8.8       8.0               8.4       8.4  
             
 
Source: Estimates based on IBES. No updated EBITDA forcast for Y since issuing profit warning.
 
(a)   Market cap for all classes of shares, which is sum of H-shares’ share price multipled by number of H-shares outstanding and A-shares’ share price multipled by number of legal person shares and A-shares outstanding. Firm value based on net debt as of Dec 31, 2004 from Company’s annual report
 
(b)   Firm Value equals market equity value plus straight debt, minority interest, less investments in unconsolidated affiliates and cash.
 
(c)   Share price updated as of October 12, 2005.
Y is currently trading at multiples significantly higher than it’s A-Share and H-Share peers.
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Research Views on Company Y
Research Summary (Last 6 months)
             
Research Firm   Rating   Target Price   Report Date
Deutsche Bank
  Sell   HK$1.50   July 11, 2005
JP Morgan
  Not Covered   N. A.   July 13, 2005
DBS Vickers Securities
  Not Rated   N. A.   August 15, 2005
Auerbach Grayson
  Sell   N. A.   August 15, 2005
Research Commentary
4   “We have cut FY05F earnings by 52% to factor in the 2Q05 weakness in olefin and refining margins and Deutsche Bank’s upward revision in Brent oil estimate to US$56.5/bbl for 2H05F. We regard privatisation by the parent, the prospect of which has been discussed at length in local media, as possible, but a technical difficulty may prevent it from happening soon, in our opinion... Given the high level of connected transactions between Y and X, we believe there are grounds for privatisation. However, the pricing difference (35%) between A and H shares presents a technical difficulty.” (Deutsche Bank, Jul 11)
 
4   “Y has been suffering due to weak refining margins since 4Q04. The sharp drop in its 1Q05 earnings was mainly driven by poor performance in the refining business... The company cannot distribute dividend unless it offsets the accumulated loss of Rmb700 million.” (JP Morgan, Jul 13)
 
4   “We expect the company’s profit level in 2H05 will depend on the improvement of the oil refining business. Based on the current situation, we won’t give an optimistic valuation. We believe the company’s oil refining business was still either in a loss or at the break-even point in July and August...” (Auerbach Grayson, Aug 15)
 
4   Dimmer outlook in 2H. We are more cautious about Y’s earnings outlook in the second half in view of the rising crude price in market. Unless China removes the price regulation of petroleum products in the short-term, we expect Y’s refineries to face higher losses in 2H, as the market crude price has advanced 12% since the end of 1H2005...” (DBS Vickers, Aug 15)
There is limited research coverage on Company Y.
Most research analysts have revised down their forecasts for Y on the back of worse than expected 1H05 results and concerns over the PRC’s below market refining margins.
Most analysts believe that the stock price does not provide any further upside from current levels.
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3   REQUEST LIST FOR UPDATING FILES
    (CITIGROUP LOGO)

 



Table of Contents

A.   Documents That Company Must Prepare And Must Actively Collaborate in Preparing Before 1st Joint Announcement
    (CITIGROUP LOGO)

 



Table of Contents

A. Documents That Company Must Prepare and Must Actively Collaborate in Preparing Before 1st Joint Announcement
Document and Content Introduction
Documents that China lawyer needs the company to provide so that the lawyer can issue legal opinions on the general offer
  1.   State Tax Registration Certificate
 
  2.   Local Tax Registration Certificate
 
  3.   Description and commitment (the draft format of which have been provided to the Company) that there have not been any violation of laws and regulations of the company in the last 5 years
 
  4.   Description and commitment (the draft format of which have been provided to the Company) that here have not been any violation of laws and regulations among Directors of board, Supervisors, and senior executives
 
  5.   Description of cases and supporting files regarding the Company holding, controlling more than 5% of outstanding shares of other companies
 
  6.   Board of Director files on this offer(including notice, motions, and resolutions) (the draft of which have been provided to the Company, these files shall be provided after the board meeting)
 
  7.   Information on the company’s holding stake and information on company’s buying and selling stakes of listed companies in the previous 6 months (the draft of which have been provided to the Company)
 
  8.   Information on stakes held by Directors of board, Supervisors, and senior executive, and relatives of these people, and information on shares of listed companies bought and sold by Directors of board, Supervisors, and senior executive, and relatives of these people in the previous 6 months (the draft of which have been provided to the Company)
 
  9.   Explanations on the source of fund of this offering (the draft of which have been provided to the Company)
 
  10.   Files on connected transactions between the company and the Target company in the last 2 years that have an accumulated amount of over RMB30 million, or that whose accumulated amount is higher than 5% of net asset value of the the Target company in the latest audited report
 
  11.   Files of transactions of Directors of board, Supervisors, and senior executive of the company and the Target company in the last years that have an accumulated amount of more than RMB50,000 .
Documents that company needs to provide for drafting offer report
  1.   Please confirm names of publications on which publish the result of the offer
 
  2.   Files that company needs to provide for the backup/reference list of the offer report
Other
  1.   1st Joint announcement (the draft of which has been distributed and read)
 
  2.   13D/A (draft has been distributed and read, and basically been finalized)
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A. Documents That X Shareholders Need to Provide
Document and Content Introduction
Backup/reference files for offer report:
Enterprise Legal Person Business License and Tax Registration Certificate for CNPC (oooo)
Name list and ID file for CNPC and Directors of board, Supervisors, and senior executive, and relatives of these people
Name list of CNPC, its connected parties, senior executives(or major responsible persons) of various parties, and direct relatives of the above mention people, ands explanations and related certificates on holding, buying or selling shares of the Target companies, Petrochina by these all these people mentioned above during 6 months before submitting the offer report
    (CITIGROUP LOGO)

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B.   List of Documents
    (CITIGROUP LOGO)

 



Table of Contents

1. List of Domestic Documents That X Needs
             
Responsible Party   Document / Content Introduction
Galaxy, King &
Wood, X
    1.     Offer to Purchase proposal and its summary
 
           
Galaxy
    2.     Financial advisory reports by China Galaxy Securities Co.
 
           
King & Wood, X
    3.     Related applications submitted to State Administration on Foreign Exchange
 
           
King & Wood
    4.     Legal Opinions by Beijing King & Wood Law Office
 
           
King & Wood/Galaxy
    5.     The acquirer shall provide according to the previous clauses the information of professional institutions and related persons regarding their holding, buying or selling stakes of the Target company, the acquirer(if the acquirer is a listed Co.) within 6 months prior to submitting the offer report
 
           
X
    6.     Receipt of performance guarantees required in China being deposited into and frozen in an account of designated commercial bank, or proof of all securities for payment placed in the custody of entrusted securities registration and settlement institution
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2. Documents / Information List Required to be Provided by the Offeror in HK
         
Responsible Party   Document / Content Introduction
X   1. Letter from the Offeror setting out the background of the Offer (both the offers for the A shares and the H shares) and intentions of the Offeror with respect to the Target and its employees (including business sustainability of the Target and major changes to be adopted such as issues like any new configuration of the Target’s fixed assets), and also reasons for long-term commercial arrangements related to the Offer and its staff ( including continued employment of staff of the Target and its subsidiaries)
 
       
X
  1.   Number of shares of the Target held by the Offeror; interests held by Offeror’s directors, number of shares held in the Target and Offeror; number of shares in the Target and Offeror held or controlled by persons acting in concert with the Offeror (list names of such persons acting in concert ); number of shares in the Target and Offeror held or controlled by persons who have accepted the Offer and have made a promise that cannot be withdrawn; number of shares in the Target and Offeror held or controlled by persons who have indemnity or other arrangements with the Offeror or any persons acting in concert with the Offeror, such arrangements may be an inducement to deal or refrain from dealing; transaction details regarding above shares, including date and price, starting from six months prior to offer date and ending on the most recent feasible date prior to offer document delivery.
 
       
X
  2.   Details of any benefit given to any director of the Target as compensation for loss of office or otherwise in connection with the Offer;
 
       
X
  3.   Details of any indemnity arrangements etc. which may be an inducement to deal or refrain from dealing which exist between the Offeror, or any person acting in concert with the Offeror, and any other person.
 
       
Freshfields/X
  4.   Letter from the Board of Directors stating that they are responsible for all published or circulated documents related to the Offer
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3.   Documents Required in the US
DOCUMENTS REQUIRED UNDER TIER 1 & TIER 2 WAIVER
     
Document   Content
Schedule 13D/A (Tier 1 & 2)
  Need to amend X’s Schedule 13D to disclose the plan and proposal for share purchase and the number of H shares under Offer to Purchase
 
   
Form 6-K
  To be used for filing press releases and general public materials disclosed to SEC
 
   
Form CB(Tier 1)
  To be used for published informational documents sent to shareholders or provided to SEC that are related to H share and A shares offer, including all sent-out forms and documents provided within the first working day post-delivery
 
   
Form F-X(Tier 1)
  To be used to entrust US procedure service agent. CB Application Form must be submitted on the same day as CB Form
DOCUMENTS REQUIRED UNDER TIER 2 WAIVER
     
Document   Content
Exchange Offer Side Documents (Tier 2)
  Documents used to assist the Target shareholders in tendering their shares and are attached to the Schedule TO. Such documents include the Letter of Transmittal, Notice of Guaranteed Delivery, Broker Dealer Letter, To Our Clients Letter and Tax Guidelines as described herein.
 
   
Offer to Purchase (Tier 2)
  Attached as an exhibit to the Schedule TO, the Offer to Purchase * is the primary disclosure document provided to the the Target shareholders. It’s a kind of notice under which a qualified institution guarantees that it shall, on settlement date, deliver share certificates of shareholders to custodian bank, together with signed Letters of Transmittal. The Offer to Purchase includes a summary term sheet, information about the Target and the acquiror, terms of the transaction, the consideration used in the transaction, the source of funds, the acquiror’s financial statements, certain past transactions and persons employed to solicit/recommend the transaction. (Please refer to the list of disclosure requirements provided earlier )
 
   
Summary Advertisement
  An advertisement of the tender offer is commonly published by acquirors in daily newspapers of national circulation as part of their 2) solicitation. The advertisement will include the identity of the acquiror and the Target, material transaction terms, the purpose of the transaction and instructions as to how shareholders can obtain the offer materials.
    (LOGO)

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Documents Required in the US (cont’d)
     
Document   Content
Schedule 14D-9 (Tier 2)
  The Target announces its recommendation and position with respect to the Offer in a Schedule 14D-9 filing. (Please refer to the list of disclosure requirements provided earlier )
 
   
Schedule TO (Tier 2)
  The primary disclosure document filed by the acquiror which the Offer to Purchase* and the Exchange Offer Side Letters are attached to as exhibits.
 
   
Schedule TO-C(Tier 2)
  All communications prior to the filing of the Schedule TO, including press releases, all written communications with shareholders and scripts for communications to shareholders must be filed with the SEC.
 
   
Schedule TO Questionnaire(Tier 2)
  Questionnaires sent to directors, senior management staff and significant shareholders of the acquiror and the Target requesting information that will be disclosed in the offer documents.
 
   
Schedule 13E-3 (if available ) (Tier 2)
  Describe other disclosure requirements required by Rule 13e-3. ( Such disclosure requirements shall be added to Offer to Purchase to satisfy requirements of Schedule To and Schedule 13E-3) (Please refer to the list of disclosure requirements provided earlier )
 
*   The exchange offer prospectus that is part of the Form F-4 and the Offer to Purchase that is part of the Schedule TO will be the same document both satisfying the disclosures requirements of the Form F-4 and the Schedule TO.
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Any terms set forth herein are intended for discussion purposes only and are subject to the final terms as set forth in separate definitive written agreements.
Prior to entering into any transaction contemplated hereby (a “Transaction”) you should determine, without reliance upon us or our affiliates, the economic risks and merits (and independently determine that you are able to assume these risks), as well as the legal, tax and accounting characterizations and consequences of any such Transaction. In this regard, by accepting this presentation, you acknowledge that (a) we are not in the business of providing (and you are not relying on us for) legal, tax or accounting advice, (b) there may be legal, tax or accounting risks associated with any Transaction, (c) you should receive (and rely on) separate and qualified legal, tax and accounting advice and (d) you should apprise senior management in your organization as to such legal, tax and accounting advice (and any risks associated with any Transaction) and our disclaimer as to these matters.
We are required to obtain, verify and record certain information that identifies each entity that enters into a formal business relationship with us. We will ask for your complete name, street address, and taxpayer ID number. We may also request corporate formation documents, or other forms of identification, to verify information provided.
We maintain a policy of strict compliance to the anti-tying provisions of the Bank Holding Company Act of 1956, as amended, and the regulations issued by the Federal Reserve Board implementing the anti-tying rules (collectively, the “Anti-tying Rules”). Moreover our credit policies provide that credit must be underwritten in a safe and sound manner and be consistent with Section 23B of the Federal Reserve Act and the requirements of federal law. Consistent with these requirements and our Anti-tying Policy:
4   You will not be required to accept any product or service offered by Citibank or any Citigroup affiliate as a condition to the extension of commercial loans or other products or services to you by Citibank or any of its subsidiaries, unless such a condition is permitted under an exception to the Anti-tying Rules.
 
4   We will not vary the price or other terms of any Citibank product or service based on the condition that you purchase any particular product or service from Citibank or any Citigroup affiliate, unless we are authorized to do so under an exception to the Anti-tying Rules.
 
4   We will not require you to provide property or services to Citibank or any affiliate of Citibank as a condition to the extension of a commercial loan to you by Citibank or any Citibank subsidiary, unless such a requirement is reasonably required to protect the safety and soundness of the loan.
 
4   We will not require you to refrain from doing business with a competitor of Citigroup or any of its affiliates as a condition to receiving a commercial loan from Citibank or any of its subsidiaries, unless the requirement is reasonably designed to ensure the soundness of the loan.
    ( CITIGROUP LOGO)

 


Dates Referenced Herein   and   Documents Incorporated By Reference

This SC 13E3/A Filing   Date   Other Filings
7/11/05
7/13/05
8/15/05
10/12/05
10/14/056-K
Filed On / Filed As Of12/23/05SC 13E3/A, SC 14D9/A, SC TO-T/A
 
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Filing Submission 0001145549-05-002156   –   Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

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