O'Melveny & Myers China Team Helps Darby Asia Invest $84.6 Million in Meiya Power



Peter M. Columbus

Erika Tucker

O'Melveny & Myers LLP

O'Melveny & Myers LLP



O'Melveny & Myers China Team Helps Darby Asia Invest $84.6 Million in Meiya Power

HONG KONG, July 29, 2004 - O'Melveny & Myers represented Darby Asia Investors in the investment in Meiya Power, an independent power producer. The O'Melveny & Myers team was led by partner Yi Zhang, with help from partners Larry Yee and Bill Satchell; counsel Larry Sussman; associates Basil Hwang and Bingna Guo; and legal consultants Liwen Chen, Faith Wang, and Jing Cao.

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The following press release, which describes the matter in greater detail, was issued by Darby Investors.

Press Release Source: Darby Asia Investors

Hong Kong and Washington DC, July 27, 2004 - Darby Asia Investors, Ltd. ("DAI"), announced that its Asian Infrastructure Mezzanine Capital Fund ("AIMCF") led a syndicate to acquire for total cash consideration of US$84.6 million a 20% interest in Meiya Power Company Limited ("MPC"), an independent power producer specializing in developing and operating power projects located in Asia, primarily China and South Korea. The interest was acquired from Hydro Quebec International, Inc.

DAI led the acquisition syndicate by providing through AIMCF US$45 million of equity capital; the syndicate also includes an Asian private equity fund managed by AIF Capital Limited. Part of the acquisition cost is financed by structured loans arranged by the Hong Kong based Structured Finance and Syndication team of Chinatrust Commercial Bank, Ltd. ("Chinatrust"), a leading regional financial institution based in Taiwan.

Richard H. Frank, Chairman of DAI and Chief Executive Officer of its parent, Darby Overseas Investments, Ltd., commented: "This significant transaction, the largest undertaken by Darby to date, completes the investment phase of AIMCF, and we plan to start raising a new mezzanine fund for Asia later this year." Mr. Frank added: " MPC's prominent position in the power sector in China makes this a highly attractive and timely investment."

Headquartered in Hong Kong, MPC has subsidiary offices in Beijing, Lanzhou, Seoul, Shanghai and Taipei. As of March 2004, MPC had made 14 investments in power/steam projects in Asia, including 12 in China, one in Taiwan and one in South Korea. MPC has majority ownership in ten of these projects.

DAI Managing Director Simon Sham said: "MPC's seasoned management team has developed the company into one of the most successful power producers in the greater China region. It has a strong track record in power project development and operation, and has earned much credibility in the power market among government officials, joint venture partners, and lenders."

Colin Tam, Chief Executive Officer of MPC, commented on the transaction: "We are delighted to welcome Darby and its financial partners to the ranks of our investors and lenders. These are strong regional financial institutions and we look forward to working with them closely as we develop other projects in China and Korea that will diversify and strengthen the earnings base of our company. The strong growth of the power demand in China will allow MPC to leverage off its past successes and relationships in making additional profitable investments."

Notes to Editors

1) Darby Overseas Investments, Ltd., through AIMCF and its $195 million Darby Latin American Mezzanine Fund, is the leading mezzanine investment firm for emerging markets. Headquartered in Washington, DC, Darby was founded by Nicholas F. Brady, former Secretary of the US Treasury. Darby sponsors and manages funds for institutional investors and high net-worth individuals that invest in Latin American private equity (including specialized financial services and technology funds), emerging markets mezzanine finance transactions in Latin America and in Asia , and global emerging markets and high yield fixed income securities. AIMCF, launched in 1998, is the leading specialist provider of mezzanine capital for the infrastructure industry in the emerging market countries of Asia. Including its investment in MPC, AIMCF has invested US$275 million, of which $230 million is currently outstanding after divestments. For more information on Darby and its lines of business please visit darbyoverseas.com.

Darby Overseas Investments was acquired in October 2003 by Franklin Resources, Inc. [ NYSE:BEN ], a global investment organization operating as Franklin Templeton Investments. Franklin Templeton Investments provides global and domestic investment management solutions managed by its Franklin, Templeton, Mutual Series and Fiduciary Trust investment teams. The San Mateo, CA-based company has more than 50 years of investment experience and over $345 billion in assets under management as of May 31, 2004. For more information, please call 1-800/DIAL BEN(r) or visit franklintempleton.com.

2) MPC is a Bermuda-incorporated investment holding company engaged in the development, operation and ownership of power and steam generation projects with a principal focus on greater China . It was founded in 1995 by Public Service Enterprise Group (" PSEG "), a US publicly traded global utilities company, and Asian Infrastructure Fund ("AIF"), a private equity fund that invests in high-growth utilities companies in Asia. PSEG and AIF have an equity stake of 50% and 30% respectively in MPC.

3) AIF Capital Limited is one of the largest Asia-based independent private equity firms with approximately US$1 billion under management. It provides growth capital for expansion, buy-outs or recapitalization, primarily to unlisted companies. Established in 1994 and headquartered in Hong Kong, the firm oversees a broad based portfolio of investments in sectors including supply chain management, financial services, manufacturing, engineering services, power generation, telecom and transportation.

4) Chinatrust Commercial Bank, Ltd. is the largest private sector commercial bank and the largest credit card issuer in Taiwan with total assets of over US$36 billion.


July 29, 2004

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