Lutianhua Increases Shares in Hengda Power      

Sichuan Lutianhua Company Ltd. (SZ: 000912) has signed an agreement with Lutianhua (Group) Co., Ltd., Sichuan Luyuan Alcohol Co., Ltd. and Sichuan Tiancheng Investment Co., Ltd. Lutianhua will use its own capital of RMB52.51 million to purchase the 36.67 million shares or 47.83% equity jointly held by the above three companies in Hengda Power Co., Ltd. Upon completion of the deal, Lutianhua will hold the 100% equity in Hengda Power.
   Hengda Power supplies steam and power to Lutianhua's Naxi plant. With the operation of expansion projects, the demand for steam in the plant will rise constantly. The existing capacity of Hengda Power can no longer meet the needs in production.
   The acquisition will facilitate the effective utilization of resources, the reduction of production cost and the long-cycle safe functioning of production units.
   Lutianhua is a leading urea producer in China. The company is located in Sichuan province but not affected by the earthquake on May 12th. Due to the forthcoming reformation of its controlling shareholder, the open deal of its shares in the stock market was suspended from February 19th and has not yet been restarted today.