China Hydroelectric (NYSE:CHC)

BEIJING, April 29, 2013 /PRNewswire-FirstCall/ -- China Hydroelectric Corporation (NYSE: CHC, CHCWS) ("China Hydroelectric" or the "Company"), an owner, developer and operator of small hydroelectric power projects in the People's Republic of China ("China"), today announced that it has closed its previously announced sale of the Yuheng hydroelectric power project, a 30 megawatt ("MW") project located in Fujian province.  This sale, for total consideration of approximately $44.3 million, has resulted in net proceeds of $20.8 million to the Company after the assumption of debt by the buyer. 

The Company previously announced the sale of the Yuheng hydroelectric power project on October 18, 2012.  This sale has decreased the Company's total installed capacity to 517.8 MW.

Fourth Quarter 2012 Results

• Revenues, net of value added taxes, from continuing operations for the fourth quarter of 2012 were $12.4 million, an increase of 25%, or $2.5 million, from $9.9 million for the fourth quarter of 2011.
• Non-GAAP net loss was $7.1 million, or $0.13 net loss per diluted ADS, for the fourth quarter of 2012 compared to net loss of $11.2 million, or $0.21 net loss per diluted ADS, for the fourth quarter of 2011.

Mr. Amit Gupta, Chairman of China Hydroelectric, stated, "We are pleased with CHC's progress and achievements during 2012. We entered the year with the intent of recovering from the difficulties caused by an unusually dry year in 2011 in Fujian and Zhejiang provinces, and succeeded due to favorable hydrological conditions and the focus and determination of our workforce. CHC's revenue grew to record levels, and we generated meaningful cash flow, thus improving our financial health. We strive to ensure that 2013 is another year of meaningful improvement on several levels, as we strengthen our management team, optimize our operating capability, and further strengthen our balance sheet."

Dr. You Su-Lin, interim Chief Executive Officer noted, "During the quarter we exceeded our core operational goals by improving production efficiency and rationalizing costs. Combined with favorable rainfall in Fujian and Zhejiang provinces, and the impact of several tariff increases during the year, we were able to achieve record revenue. We also improved our liquidity position through the sale of the Yuheng hydroelectric project and the refinancing of $121.8 million of debt. We are working on additional non-dilutive financing opportunities and aim to resolve any remaining liquidity challenges in the near future."

Third Quarter Ended September 30, 2012

• Revenues, net of value added taxes, from continuing operations for the three months ended September 30, 2012 were $21.0 million, an increase of 30%, or $4.9 million, from $16.1million for the three months ended September 30, 2011. 
• Net loss attributable to China Hydroelectric Corporation shareholders was $1.7 million in the third quarter of 2012 compared to net loss of $4.1 million in the same period in 2011 principally due to more favorable hydrological factors, partially offset by the accrual of EGM related costs.
• Non-GAAP net loss was $1.0 million, or $0.02 net loss per ADS, for the third quarter of 2012 compared to net loss of $3.2 million, or $0.06 net loss per ADS, for the third quarter of 2011. For a reconciliation between GAAP and non-GAAP earnings, see the table entitled "GAAP Net Income/(Loss) to Non-GAAP Net Income/(Loss) Reconciliation."
• Weighted average American depository shares ("ADSs") used in the third quarter of 2012 and 2011 earnings per share calculation were 54.0 million ADSs, representing 162.0 million ordinary shares, and 52.5 million ADSs, representing 157.3 million ordinary shares, respectively.

"The new Board of Directors has devoted a significant amount of time and effort to ensure a smooth transition for the Company following recent changes in the composition of the Board of Directors and management. With the able assistance of Dr. You-Su Lin serving as interim Chief Executive Officer and the efforts of the transition committee of the Board, I am pleased that the business operations have proceeded without any disruption," stated Amit Gupta, recently elected Chairman of the Board.

Dr. You-Su Lin, interim chief executive officer, said, "I am pleased to report that China Hydroelectric continued to benefit from favorable hydrological conditions in two key provinces as presented below and, as a result, realized record revenues, gross profit, operating income and EBITDA for the third consecutive quarter. These results compare favorably with the same periods in 2011 since precipitation was well below average throughout all of 2011. The Company's liquidity position, which is principally dependent on two key factors, cash flow generated from operations and the state of domestic financial markets in China, materially improved as the year progressed.  Lending by banks and other financial institutions in China, which first showed notable signs of improvement in the second quarter of 2012, has enabled the Company to raise a total of $91.7 million from new borrowings and favorable refinancings this year."

"With the previously announced signing of a Share Transfer Agreement to sell the 30 megawatt Yuheng hydroelectric power project located in Fujian province, and the record operating results as well as recent borrowing and refinancing activity, the Company's short-term liquidity needs will be met. Management's long-term goal, through further negotiations with lending institutions, is to more closely match the Company's debt maturity to the long-life of its operating assets, thereby minimizing the likelihood of future liquidity crises," added Dr. Lin.

Business Outlook for Full Year 2012

As of the date of this release, Zhejiang and Fujian provinces, our higher tariff regions, have experienced lower than normal precipitation in the current quarter; however, Yunnan province has experienced higher than normal precipitation. As fourth quarter precipitation is typically the third lowest quarter, deviations from average will not have a material effect on full year results. Therefore, the precipitation to be realized in the fourth quarter of 2012 will not affect the likelihood that 2012 will be an above than average year in terms of precipitation

NEW YORK, October 18, 2012 /PRNewswire-FirstCall/ -- China Hydroelectric Corporation (NYSE: CHC, CHCWS) ("China Hydroelectric" or the "Company"), an owner, developer and operator of small hydroelectric power projects in the People's Republic of China ("PRC"), today announced the Company has entered into an Share Transfer Agreement to sell its Yuheng hydroelectric power project, a 30 megawatt ("MW") project located in Fujian province, for total consideration of RMB279.0 million (approx. US$44.3 million), including the assumption of debt by the buyer. The sale of the project is expected to close in early 2013 and will result in a small profit to the Company.

Mr. Amit Gupta, chairman of the board of China Hydroelectric, stated, "The sale not only helps the Company move a step closer to fixing its current liquidity situation, but also reaffirms the fundamental value of the Company's assets. In addition to this transaction, the Company continues to pursue other avenues to address its remaining liquidity needs in order to provide sufficient time for the new board to work with management on a comprehensive, long-term financing solution."

NEW YORK, Oct. 16, 2012 /PRNewswire-FirstCall/ -- China Hydroelectric Corporation (NYSE: CHC, CHCWS) (the "Company"), an owner, developer and operator of small hydroelectric power projects in the People's Republic of China, today announced that on October 15, 2012, the Company's board of directors appointed Dr. You- Su Lin as its interim chief executive officer and Mr. Amit Gupta as the chairman of the board. In addition, the board of directors has appointed Mr. Gupta and Mr. Shadron Lee Stastney to the Company's compensation committee, and Ms. Moonkyung Kim and Mr. Jui Kian Lim to join Dr. Yong Cao on the Company's corporate governance and nominating committee. Mr. Gupta will serve as the chairman of the compensation committee, and Ms. Kim will serve as the chairperson of the corporate governance and nominating committee.  The Company further announced that the board of directors has authorized and appointed Dr. Lin, Mr. Gupta, Mr. Lim and Ms. Liya Chen , chief financial officer of the Company, as lead members of a transition committee to address matters relating to the transition of the new board, cost reductions, and the ongoing search for a permanent chief executive officer, among other transitional matters. 

NEW YORK, October 9, 2012 /PRNewswire-FirstCall/ -- China Hydroelectric Corporation (NYSE: CHC, CHCWS) (the "Company"), an owner, developer and operator of small hydroelectric power projects in the People's Republic of China, today announced that it had received notice from the New York Stock Exchange ("NYSE") on October 8, 2012 that the Company had regained compliance with the NYSE's continued listing standard that requires that the average closing price of the Company's American Deposit Shares ("ADS") not fall below $1.00 per ADS for any consecutive 30-trading-day period.

In addition, the Company also announced that its board of directors has appointed directors Yun Pun Wong and Moonkyung Kim to the Company's audit committee, to join current audit committee member, Dr. Yong Cao. Yun Pun Wong will also serve as the financial expert and chairman of the audit committee.

NEW YORK, September 13, 2012 /PRNewswire-FirstCall/ -- The Board of Directors of China Hydroelectric Corporation (NYSE: CHC, CHCWS) (the "Company"), an owner, developer and operator of small hydroelectric power projects in the People's Republic of China, today announced that it has issued the following letter to its shareholders in response to recent actions taken by a minority shareholder group:

Dear Shareholder of China Hydroelectric Corporation:

As you are aware, a group of minority shareholders (the "Insurgents") of China Hydroelectric Corporation (the "Company") has sought to unilaterally call an extraordinary general meeting of shareholders in an attempt to acquire control of your Company by seeking to replace the Company's Board of Directors (the "Board") with their own nominees.

The Board is more resolute than ever that these efforts being pressed by the Insurgents are not in the best interests of a majority of shareholders and wish to make you aware of the following:

• The Company filed a Complaint against the Insurgents in Federal Court on September 10, 2012. The complaint alleges that the Insurgents violated Section 13(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), by failing to make timely disclosure of their plans to take control of the Company and by making misleading disclosures and omitting material facts in their disclosures to shareholders. The complaint seeks to, among other things, enjoin the Insurgents from voting or soliciting proxies until they comply with Section 13(d) of the Exchange Act. The Judge assigned to this matter has granted our request for expedited discovery, and a preliminary hearing is scheduled for October 4, 2012.
• The Insurgents have no experience in operating or managing businesses of any kind, let alone hydroelectric plants located in the People's Republic of China. Your management is composed of the Company's founders, experienced developers, owners and operators of hydroelectric assets around the world, including in China since the early 1990's. Meanwhile, the Insurgents' proposed slate of Directors is composed of inexperienced financial players with virtually no experience or expertise operating or managing businesses in any industry.
• The Insurgents have NO plan for improving the Company's results. The Insurgents have criticized the Company while offering no plan as how the Insurgents would increase value for the shareholders of the Company. Your management has already taken concrete measures to enhance the Company's performance, as indicated by the Company's significantly improved financial and operating performance in 2012 versus 2011. The Board and management are committed to building on the Company's strong results so far in 2012 and are confident that these strong results will continue. To this end, the Board and the Company have retained Morgan Stanley & Co LLC ("Morgan Stanley") to serve as its exclusive financial advisor to assist the Board in identifying and evaluating potential strategic alternatives available to the Company to unlock and increase shareholder value. The Insurgents only "plan" is to take control of the Company without paying the other shareholders ANY consideration for that control.
• The Insurgents' meeting scheduled for September 28, 2012 is NOT a valid meeting. The Insurgents' failure to comply with the Company's Charter and the NYSE rules regarding the setting of a record has created confusion and uncertainty with respect to the Insurgents' purported meeting and will certainly result in the disenfranchisement of a meaningful number of shareholders. Your Board does not believe the purportedSeptember 28th meeting is a validly called meeting. We urge all of our shareholders to mark the box "Against" on the Insurgents White proxy card and return it pursuant to the instructions on the card.

THE BOARD AND MANAGEMENT ARE DETERMINED TO INCREASE VALUE FOR ALL SHAREHOLDERS. WE URGE YOU TO VOTE "AGAINST" THE REMOVAL OF THE CURRENT DIRECTORS AND "AGAINST" THE INSURGENTS' PROPOSED DIRECTORS ON THE INSURGENTS' WHITE PROXY CARD.

If you have any questions, please do not hesitate to contact John Kuhns or Mary Fellows at either 646-467-9810 or 860-435-7000.

Best regards,

John Kuhns, Chairman

NEW YORK, September 11, 2012 /PRNewswire-FirstCall/ -- China Hydroelectric Corporation (NYSE: CHC, CHCWS) ("China Hydroelectric" or the "Company"), an owner, developer and operator of small hydroelectric power projects in the People's Republic of China, today announced that on September 10, 2012, the Company filed a complaint (the "Complaint") in the United States District Court for the Southern District of New York (the "Court"), naming as defendants NewQuest Capital Management (Cayman) Limited, NewQuest Asia Fund I (G.P.) Ltd., NewQuest Asia Fund I, L.P., CPI Ballpark Investments Ltd, Swiss Re Financial Products Corp., China Environment Fund III, L.P., China Environment Fund III Management, L.P., China Environment Fund III Holdings Ltd., Donald C. Ye, Shelby Chen, Michael Li, Larry Zhang, Ian Zhu, Aqua Resources Asia Holdings Limited, Aqua Resources Fund Limited, FourWinds Capital Management, Abrax, Abrax Limited, IWU International Ltd. (collectively the "Insurgent Group"). The Complaint alleges that the Insurgent Group violated Section 13(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), by failing to file on a timely basis accurate disclosures required under the federal securities laws.

Specifically, the Complaint alleges that the Insurgent Group has been secretly planning to take control of the Company for an extended but unknown period of time. The Complaint alleges that the Insurgent Group violated the federal securities laws by failing to make timely disclosure of their plans and by making misleading disclosures and omitting material facts in the disclosures they finally made to shareholders of the Company and the Securities and Exchange Commission. The Complaint seeks declaratory and injunctive relief, including enjoining defendants from voting or soliciting proxies until they comply with Section 13(d) of the Exchange Act.

On September 10, 2012, United States District Judge Harold Baer signed an Order to Show Cause scheduling a preliminary injunction hearing on the Company's claims for October 4, 2012. The Court also scheduled an expedited discovery schedule in advance of the hearing.

NEW YORK, September 8, 2012 /PRNewswire-FirstCall/ -- The Board of Directors of China Hydroelectric Corporation (NYSE: CHC, CHCWS) ("China Hydroelectric" or the "Company"), an owner, developer and operator of small hydroelectric power projects in the People's Republic of China (the "PRC"), today issued the following letter to its shareholders in response to recent actions taken by a minority shareholder group:

Dear Shareholder of China Hydroelectric Corporation:

As you may be aware, a group of minority shareholders (the "Insurgents") of China Hydroelectric Corporation (the "Company") has sought to unilaterally call an extraordinary general meeting of shareholders in an attempt to acquire control of your Company by seeking to replace the Company's Board of Directors (the "Board") with their own nominees. The Insurgents are trying to take advantage of the Company's currently low stock price in order to seize control of the Company without paying a control premium or even putting forward an alternative plan for the operation of the Company moving forward. The Board believes that these efforts being pressed by the Insurgents, led by NewQuest Capital Partners, to obscure their own internal agenda, are not in the best interests of a majority of shareholders, will lead to meaningful value destruction and represents a significant risk to the interest of all shareholders.

To advance their efforts, the Insurgents have purported to call their own unauthorized extraordinary general meeting on September 28, 2012. The Board requests that shareholders ignore and discard any proxies or solicitation materials they may receive from the Insurgents for a September 28th meeting.

The Insurgents have made certain criticisms of the Board and management, all of which the Board and management believe are unfounded, inaccurate and irresponsible. In that regard, you should be aware of the following:

• The Insurgents Offer No Management or Operating Experience. Your management team is comprised of the founders of the Company, seasoned managers and operators of hydroelectric assets. They have a plan to move the Company forward and are best suited to turn around the Company, as witnessed by the Company's recent improving stock price performance. The Insurgents' proposed slate of directors offers NO management experience and NO operating experience. Rather, the Insurgents seem to be piecing together a slate on the fly. They offer up several inexperienced financial players, none of whom have any experience in managing or operating a hydroelectric business. For example, the Insurgents' have stated that Dr. You-Su Lin and Dr. Yong Cao will continue to serve as directors of the Company. The Company believes that that is not the case and that Dr. Lin and Dr Cao would resign rather than serve with the Insurgents' slate. Further, the Insurgents originally assumed that the Company's former President, James Li would serve on their board and act as President and Chief Executive Officer of the Company after they took control, but Mr. Li has resigned from the Company, leaving the Insurgents with no senior management at all. Accordingly, if the Insurgents are successful in taking control from the current experienced management team, the Company would have no continuing directors, no senior management, no operating expertise and no plan going forward.
• The Insurgents Offer No Operating Plan for Your Company. The Insurgents have leveled numerous accusations against the Board and management, but have failed to offer any plan for how they would improve, alter or change the Company's operations. Quite simply, the Insurgents have no plan, let alone any well thought out and constructive ideas, other than to seize control of your Company for their own benefit.
• Your Board and the Company have Retained Morgan Stanley. The Board and Company have retained the services of Morgan Stanley & Co. LLC ("Morgan Stanley") to serve as the Company's financial advisor. In that role Morgan Stanley is working with management and the Board to evaluate managements' financing and project expansion plans and consider strategic alternatives available to potentially unlock and increase shareholder value. Unlike the Insurgents' non-existent plan, your Board, and management, with the assistance of Morgan Stanley, are working hard to increase value for ALL shareholders.
• Your Board and Management have Positioned the Company for Success. Like you, the Board and management were extremely disappointed with the historical performance of our stock in 2011. However, so far in 2012, the Company has achieved RECORD results across the board, including consolidated net revenue, gross profit, operating income and EBITDA. If not disrupted by a change of control, we are confident that the Company's improving financial condition will be positively reflected in our share price.
• We are Concerned About the Potential for Highly Dilutive Financings by the Insurgents. The Insurgents have criticized the Board and management for failing to secure adequate long term funding to meet the Company's liquidity needs. They simply ignore the Company's recent announcement of the consummation of$74 million of bank debt refinancing in China, as well as the Company's announcement that it expects to be in a position to obtain more such refinancing during the balance of 2012 - something that the Board greatly fears will be at risk should the Insurgents succeed in seizing control of your Company. By contrast, the Insurgents fail to put forth a plan of their own. Some time ago, CPI (NewQuest) did put forward financing proposals that your Board rejected because, among other things, they were highly dilutive to existing shareholders and were designed to vest control of your Company with NewQuest - something the Board believed was not (and continues to believe is not) in the best interest of ALL shareholders. Given the Insurgents lack of any financing plan, we can only assume that, should the Insurgents be successful in their efforts to seize control of your Company, their hand-picked board will approve the same highly dilutive financing your current Board determined was destructive to your shareholder value.

Your Board and Management believe the Insurgents are self-serving and not acting in the best interests of ALL shareholders. Further, the Insurgents lack of relevant experience makes them wholly unqualified to operate your Company should they succeed in seizing control. Shareholders should ask themselves:

• Do the Insurgents claim to have the power to make it rain or instantly improve capital markets? The Company has been significantly and adversely impacted by (i) the precipitous drop in the value of U.S. listed Chinese companies on the NYSE and Nasdaq generally, (ii) the tightening of credit in China and elsewhere, and (iii) the very low precipitation level experienced in 2011. The Insurgents have not disclosed any coherent plan as to how they would address these matters any differently than management, we can only assume that they expect to simply be able to make it rain more - as the amount of precipitation is the primary driver of the Company's operating results - and get the numerous banks and other institutions the Company has worked with to be more responsive to the Company's financing needs. They also conveniently ignore the Company's record results in 2012.
• Do the Insurgents plan to simply fire critical personnel and gut internal controls? The Insurgents claim that General and Administrative expenses are too high. They are wrong. They treat the costs of operating a public company in the U.S. and maintaining robust internal and accounting controls, many of which went into effect during 2011, the year following the Company's IPO, as unnecessary and wasteful. Again, they are wrong. The Company is well aware of the need for expenses to be closely monitored and controlled. In fact, during 2012, the Company has undertaken significant expense reduction efforts. The Insurgents put forth no specific plan for additional steps they would expect to take. We think they have no such plan, but if they do, we would be deeply concerned it would involve undercutting shareholder accountability and gutting the Company's internal controls.
• Do the Insurgents understand the severely disruptive impact their efforts will have on the Company's business and prospects? Your management maintains important relationships with key economic partners, such as the Company's banks and China's electric grid companies, who purchase all of the electricity generated by the Company. The Company runs a significant risk of severely harming those critical relationships if the Insurgents are successful in their takeover efforts.
• Do the Insurgents have any plan on how to get the price of our shares up? Since the Insurgents first made public their efforts to seize control of your Company without paying any control premium, our share price has fallen. This is extremely unusual in a takeover situation, where the price of shares would customarily increase, and is a strong indication that the marketplace has no confidence in the Insurgents or their activities.

The Company will provide you with a proxy card and solicitation materials in the near future. Please do not confuse our materials with those provided by the Insurgents. We ask you to discard any proxy materials with a White proxy care provided by the Insurgents.

Your Board and management continue to be committed to increasing and preserving value for ALL SHAREHOLDERS and would be please to discuss any questions you may have with you and provide any further explanation or detail you request. We recommend that you reject all efforts by the Insurgents to wrest control of your Company away from the rest of the shareholders without offering any value or plans for increasing value to all shareholders. To that end, we ask for your continued support. If you have any questions, please do not hesitate to contact John Kuhns or Mary Fellows at either 646-467-9810 or 860-435-7000.

Thank you.

Best regards.

John D. Kuhns, Chairman

NEW YORK, September 6, 2012 /PRNewswire-FirstCall/ -- The Board of Directors of China Hydroelectric Corporation (NYSE: CHC, CHCWS) ("China Hydroelectric" or the "Company"), an owner, developer and operator of small hydroelectric power projects in the People's Republic of China (the "PRC"), today announced that it has called an Annual General Meeting of Shareholders (which will also serve as an Extraordinary General Meeting of Shareholders) for October 19, 2012. The record date for shareholders entitled to vote at that meeting is September 17, 2012.

As previously disclosed, a group of shareholders (the "Minority Group") of the Company have sought to call their own extraordinary general meeting on September 28, 2012 and have sought to set a record date for that meeting of August 29, 2012. At their proposed September 28th Meeting, the Minority Group will attempt to acquire control of the Company by seeking to replace all members of the Board not located in the PRC with their own nominees, as well as removing the senior executives and founders of the Company. Among other things, for shareholders, this raises a concern that the Minority Group is attempting to take advantage of the Company's currently low stock price in order to take control of the Company without paying a control premium or even putting forth an alternative or coherent plan for the operations of the Company moving forward. The Company's Board of Directors is concerned that the Minority Group's proposal will lead to meaningful value destruction for shareholders. The Board also notes that in their notice of meeting sent to shareholders, the Minority Group has included two existing directors of the Company, Dr. You-Su Lin and Dr. Yong Cao, as part of their proposed board. The Board has been advised that Dr. Lin and Dr. Cao would not be prepared to remain as directors of the Company if the new directors are elected as proposed by the Minority Group. This would leave the Company with no continuing directors, no senior management, no operating expertise and no plan going forward.

The Board is of the view that these efforts by the Minority Group are not in the best interest of shareholders. The Board believes that it is appropriate for all shareholders to be provided with an opportunity to consider and vote on the election of directors of the Company based upon full and complete information. However, in seeking to set the record date for their proposed meeting, the Minority Group has failed to comply with the Listed Company Manual of the New York Stock Exchange ("NYSE"), which requires 10 days advance notice of the setting of the record date. The Board is very concerned that this will create confusion, uncertainty and result in the disenfranchisement of a meaningful number of shareholders. Further, in light of these requirements of the NYSE, the Board considers that the extraordinary special meeting being sought by the Minority Group must be called through or by the Board, with the Board giving due regard to (i) the rights of members holding at least one-third of the shares of the Company and (ii) the NYSE Listed Company Manual.

Accordingly, the Board has resolved to call the Annual General Meeting of the Company (which last year was held on October 31st) and an extraordinary general meeting of the Company on the earliest date on which a record date can be validly set and notices provided in accordance with applicable laws, rules, regulations and contractual obligations to which the Company is subject, including those of the NYSE. That date is October 19th. The Minority Group has provided no explanation as to why holding a meeting on October 19th (a mere 21 days following the Minority Group's proposed date of September 28th) is not acceptable to them.

While the Minority Group asserts that they have attempted to avoid this public exchange by inviting a dialogue with the Board, no meaningful contact was made by the Minority Group prior to their public call for their proposed September 28th meeting. The Board welcomes such a dialogue and has been and remains willing to engage in discussions with the Minority Group regarding any concerns or issues they may have with respect to the Company, its business and management, as well as to ensure that the Company's Annual General Meeting and Extraordinary General Meeting is held in a manner that allows shareholders to properly propose and consider the appointment of directors.

In light of the foregoing, the Board considers that the Notice of EGM sent to shareholders onAugust 30, 2012 by the Minority Group is invalid and that any resolutions purportedly passed at the meeting on September 28, 2012 will be of no effect. Further, the Board requests that shareholders ignore and discard any proxies or solicitation materials they may receive from the Minority Group for a September 28th meeting. The Company (and, if they so choose, the Minority Group) will be providing proxy cards and solicitation materials for the October 19thmeeting in the near term.

Second Quarter 2012 Results

• Revenues, net of value added taxes, from continuing operations for the three months ended June 30, 2012 were $33.9 million, an increase of 72%, or $14.2 million, from $19.7 million for the three months ended June 30, 2011.
• Non-GAAP net income was $6.4 million, or $0.12 net income per ADS, for the second quarter of 2012 compared to net loss of $0.2 million, or $0.00 net loss per ADS, for the second quarter of 2011.

"Management is very pleased with the Company's record consolidated net revenue, gross profit, operating income and EBITDA for the second quarter of 2012, as well on a year to date basis, with all of our power projects fully functioning in accordance with design. Our operating results were boosted by the above average precipitation experienced in Fujian and Zhejiang provinces, which amounted to 131% and 114% of average precipitation, respectively. We also received higher tariffs for some of our power projects in the second quarter. These results are in sharp contrast to those for the three and six months of 2011 when precipitation levels in all four provinces where we have power projects were materially below historical average levels," stated Mr. John D. Kuhns, Chairman and Chief Executive Officer.

"Along with these positive trends in operating results, the bank lending market in China has improved. While our ability to borrow remains somewhat challenging, we have been able to secure a total of $74.2 million through borrowings from banks and non-financial institutions so far this year, well ahead of what we had expected at the beginning of the year. As previously announced, we are pursuing the sale of one of our power projects. If a definitive agreement is reached, we believe the sales proceeds would substantially meet our current liquidity needs. Simultaneously, we continue to explore other financing alternatives, including capital raising from off-shore debt markets in Hong Kong and the United States. With the Company's share price continuing to trade at a depressed level, we believe seeking working capital and expansion financing by issuing equity securities would be unacceptably dilutive to our shareholders," Mr. Kuhns continued.

Mr. Kuhns concluded, "On a macro level, we are encouraged that recent fiscal and monetary actions by the Chinese government and monetary authorities will provide a boost to the economic and financing environment in China."

Business Outlook for Full Year 2012

As of the date of this release, rainfall in the third quarter of 2012 has been well above that of the same period in 2011 and more in line with 2010's above average level, particularly in Fujian and Zhejiang provinces, our higher tariff regions. However, the impact that the rest of this year's rainfall will have on the Company's full year results remains uncertain at this time as the precipitation levels in the upcoming quarters are not known.

NEW YORK, June 30, 2012 /PRNewswire-Asia-FirstCall/ -- China Hydroelectric Corporation (NYSE: CHC, CHCWS) (the "Company"), an owner, developer and operator of small hydroelectric power projects in the People's Republic of China, today announced that on June 27, 2012, the Company was notified by the New York Stock Exchange ("NYSE") that it was not in compliance with the NYSE's continued listing standard that requires that the average closing price of the Company's American Deposit Shares ("ADS") not fall below $1.00 per ADS for any consecutive 30-trading-day period.

The Company's ADS continue to trade on the NYSE, subject to the Company's compliance with other NYSE continued listing requirements. Under NYSE rules, the Company has six months following receipt of the notification to regain compliance with the minimum share price requirement. The Company can regain compliance during the cure period if the Company's ADS have a closing share price of at least $1.00 on the last trading day of any calendar month during the period and also have an average closing share price of at least $1.00 over the 30 trading-day period ending on the last trading day of that month or on the last day of the cure period. The Company has notified the NYSE that the Company intends to cure this deficiency within the prescribed timeframe.

"While this notice is disappointing, we are very confident in our strategy and encouraged by the positive developments which we have experienced so far this year," said John D. Kuhns, Chairman and Chief Executive Officer. "We intend to deliver our plan to return to compliance with the NYSE regarding the listing standard, and we will explore various initiatives and work towards successful execution of the plan."

First Quarter 2012 Results

• Revenues, net of value added taxes, from continuing operations for the three months ended March 31, 2012 were $22.5 million, an increase of 105%, or $11.5 million, from $11.0 million for the three months ended March 31, 2011.
• Non-GAAP net income was $1.8 million, or $0.03 net income per ADS, for the first quarter of 2012 compared to net loss of $4.4 million, or $0.09 net loss per ADS, for the first quarter of 2011.

"In light of the challenges that China Hydroelectric faced in fiscal 2011, I am gratified to report several positive developments so far in fiscal 2012," stated Mr. John D. Kuhns, Chairman and Chief Executive Officer.

"The Company's consolidated net revenue, gross profit, operating income and EBITDA for the first quarter of 2012, each of which represent record amounts, were positively impacted by above average precipitation experienced in the two eastern provinces of Fujian and Zhejiang. This is in stark contrast to our financial results for the first quarter of 2011 when precipitation in all four provinces where we have power projects fell well below historical average levels. Since year-to-year variations in hydrological conditions are a fundamental part of the hydroelectric power generation business, it is important to keep historical averages in mind when assessing our results of operations," Mr. Kuhns stated.

Mr. Kuhns continued, "On another front, tariffs, or the prices that the grids pay us for the electric power we generate, have increased for six of our twenty-six power projects, which represent 21.5% of our total installed capacity. The positive effect of these six tariff increases, which range from 5.8% to 17.0%, equates to an increase in estimated net revenue and operating income in excess of $1 million annually at average precipitation levels. While we cannot predict when tariffs might be increased for our other power projects, or the magnitude thereof, we remain hopeful that we will see additional tariff increases."

"We are encouraged by the new multibillion dollar economic stimulus program announced by the Chinese government during early 2012 and remain optimistic that this will lead to an expansion of local bank lending programs. However, the bank lending and capital markets environments for our Company continue to be problematic. While since January 1, 2012, we have been able to raise a total of $21.5 million through borrowings from banks and non-financial institutions, our continued ability to refinance a certain portion of our current bank debt and short term loans remains challenging. The consensus that domestic banks will be more active lending in 2012 than in 2011, as well as the timing and extent of such lending improvement, remains to be seen. Furthermore, our interest in obtaining financing from off-shore markets, such as Hong Kong and the United States, has not yet yielded any results," Mr. Kuhns concluded.

Business Outlook for Full Year 2012

As of the date of this release, rainfall in the second quarter of 2012 has been well above that of the same period in 2011 and more in line with above average level we experienced in 2010, particularly in Fujian and Zhejiang provinces, our higher tariff regions. However, the impact the rest of the year's rainfall will have on the Company's full year results remains uncertain at this time as the precipitation levels in the upcoming quarters are not known.

NEW YORK, May 22, 2012 /PRNewswire-Asia-FirstCall/ -- China Hydroelectric Corporation (NYSE: CHC, CHCWS) ("China Hydroelectric" or the "Company"), an owner, developer and operator of small hydroelectric power projects in the People's Republic of China ("China"), today announced the Company has received tariff increases at four more of its hydroelectric power projects. These tariff increases are in addition to the recently announced tariff increases for two other power projects in Fujian province.

The Company has received substantial tariff increases for its Dazhaihe hydroelectric power project ("Dazhaihe"), one of its ten projects located in Yunnan province. Dazhaihe, acquired in April 2011, has 15 megawatts ("MW") of installed capacity and receives seasonally adjusted tariff rates. The new tariffs for each season represent an effective annual increase of 17% for Dazhaihe.

Furthermore, the Company has received a RMB 0.021 per kilowatt hour tariff increase for the Jinling complex which is located in Fujian Province and consists of three hydroelectric power projects: Dongguan, with 4.8 MW of installed capacity, Qianling, with 10.0 MW of installed capacity, and, Jinjiu, a 3.0 MW project. These three facilities received tariff increases of 7.5%, 8.8% and 7.5%, respectively.

Mr. John D. Kuhns, Chairman and Chief Executive Officer of China Hydroelectric, stated, "We are pleased to receive the increases in tariffs paid to these four projects, particularly because they became effective before the rainy seasons in both Yunnan and Fujian. We are especially pleased with the timing of the substantial seasonal increase for Dazhaihe for the June to October period since it corresponds with Dazhaihe's peak power generation period. Based on our current precipitation outlook, we expect to see a welcome revenue increase for Dazhaihe, as well as for Dongguan, Qianling and Jinjiu. These tariff increases follow our recent tariff increases for two other power projects in Fujian province, and we look forward to additional tariff increases of varying magnitudes for our other hydroelectric power projects to, among other things, generally keep pace with two tariff increases granted to thermal electric power producers in China in 2011," concluded Mr. Kuhns.

Fourth Quarter 2011 Results

• Revenues, net of value added taxes, from continuing operations for the three months ended December 31, 2011 were $10.7 million, an increase of 13%, or $1.2 million, from $9.5 million for the three months ended December 31, 2010.
• Non-GAAP net loss was $11.2 million, or $0.21 net loss per ADS, for the fourth quarter of 2011 compared to net loss of $4.8 million, or $0.09 net loss per ADS, for the fourth quarter of 2010.

Mr. John D. Kuhns, Chairman and Chief Executive Officer of the Company, reported that "2011 unfortunately proved to be a particularly difficult year due to a number of factors the Company could not control: the weather, the bank lending environment in China, off shore debt markets and the equity markets. We are, however, pleased to report that weather conditions thus far in 2012 have been very favorable, and that the Chinese government has taken steps to revitalize lending."

Business Outlook for First Quarter 2012 

As of the date of this release, rainfall in the first quarter of 2012 is well above that of the same period in 2011 and more in line with 2010's level, particularly in Fujian and Zhejiang, our higher tariff regions. We similarly expect revenues in the first quarter of 2012 to exceed revenues recorded in the first quarter of 2011.

Third Quarter 2011 Financial and Operational Results

Revenues

• Revenues, net of value added taxes, for the three months ended September 30, 2011 were $16.3 million, a decrease of 11%, or $2.1 million, from $18.4 million for the three months ended September 30, 2010.
• Gross profit was $7.6 million for the third quarter of 2011, a decrease of $4.4 million, from $12.0 million in the third quarter of 2010. The $4.4 million decrease in gross profit reflects a $4.6 million decrease by existing projects as of September 30, 2010, offset by a $0.2 million increase contributed by projects acquired in the last twelve months. Gross margin for the third quarter of 2011 was 46% compared to 65% in the same period of 2010 due principally to lower revenue and the fixed nature of expenses included in cost of revenues.
• Net loss attributable to China Hydroelectric shareholders was $4.1 million in the third quarter of 2011 compared to net income of $1.7 million in the same period in 2010. Net loss attributable to ordinary shareholders was $4.1 million, or $0.08 net loss per ADS, for the third quarter of 2011 compared to net income of $1.7 million, or $0.03 net income per ADS for the third quarter of 2010.
• Non-GAAP net loss was $3.2 million, or $0.06 net loss per ADS, for the third quarter of 2011 compared to net income of $3.0 million, or $0.06 net income per ADS, for the third quarter of 2010. For a reconciliation between GAAP and non-GAAP earnings, see the table entitled "GAAP Net Income / (Loss) to Non-GAAP Net Income / (Loss) Reconciliation."

This decrease in revenue was due principally to less than average hydrological conditions in the current quarter compared to the prior year quarter, which experienced better than average hydrological conditions, and, to a lesser extent, a lower effective tariff rate due to the mix of revenue from the respective provinces. These factors were partially offset by incremental revenue contributed in the current quarter by projects acquired after September 30, 2010.

The $2.1 million decrease in revenue for the three months ended September 30, 2011 was primarily attributable to the net effect of (i) a $3.8 million, or 21%, decrease in revenue contributed by projects owned as of September 30, 2010, principally due to hydrological factors, and (ii) a $1.7 million revenue contribution by projects acquired in the twelve month period since September 30, 2010. Such projects have a total installed capacity of 70.4 MW as set forth below.

Business Outlook for Full Year 2011

Although Yunnan and Zhejiang experienced higher than normal precipitation in the current quarter, both have experienced below average precipitation for of the nine months ended September 30, 2011. The precipitation to be realized in the fourth quarter of 2011 will not affect the likelihood that 2011 will be a less than average year in terms of precipitation.

• Revenues, net of value added taxes, for the three months ended June 30, 2011 were $20.5 million, a decrease of 9%, or $2.0 million, from $22.5 million for the three months ended June 30, 2010. This decrease was due principally to less than average hydrological conditions in the current quarter compared to the prior year quarter, which experienced better than average hydrological conditions, and, to a lesser extent, a lower effective tariff rate due to the mix of revenue from the respective provinces. These factors were partially offset by incremental revenue contributed in the current quarter by projects acquired after June 30, 2010.
• The $2.0 million decrease in revenue for the three months ended June 30, 2011 was primarily attributable to the net effect of (i) a $5.4 million, or 24%, decrease in revenue contributed by projects owned as of June 30, 2010, principally due to hydrological factors, and (ii) a $3.4 million revenue contribution by projects acquired in the twelve month period since June 30, 2010. Such acquired projects have a total installed capacity of 133.3 MW as set forth below.
• The Company sold 463.2 million kWh in the three months ended June 30, 2011, a decrease of 5.9 million kWh, or 1%, from 469.1 million kWh sold in the three months ended June 30, 2010, attributable to a 104.8 million kWh contribution from projects acquired since June 30, 2010, offset by a 110.7 million kWh, or 24%, decline in power sold by existing projects.
• The consolidated effective utilization rate in the three months ended June 30, 2011 was 42%, compared to 55% in the three months ended June 30, 2011. The lower consolidated effective utilization rate was principally the result of below average precipitation in Zhejiang and Fujian provinces, compared to above average precipitation in those two provinces in the three months ended June 30, 2010.
• The effective tariff decreased from RMB 0.35/kWh in the three months ended June 30, 2010 to RMB 0.29/kWh in the three months ended June 30, 2011. The decrease was caused by a higher revenue contribution from projects located in Yunnan province, where tariffs are lower than in the two eastern provinces.
• Net loss attributable to China Hydroelectric shareholders was $1.4 million in the second quarter of 2011 compared to net income of $5.9 million in the same period in 2010. Net loss attributable to ordinary shareholders was $1.4 million, or $0.03 net loss per ADS, for the second quarter of 2011 compared to net income of $5.9 million, or $0.11 net income per ADS for the second quarter of 2010.
• Non-GAAP net loss was $0.2 million, or $0.004 net loss per ADS, for the second quarter of 2011 compared to net income of $7.1 million, or $0.14 per ADS, for the second quarter of 2010. For a reconciliation between GAAP and non-GAAP earnings, see the table entitled "GAAP Net Income (loss) to Non-GAAP Net Income (Loss) Reconciliation."

Weighted average American Depository Shares used in the second quarter 2011 and 2010 earnings per share calculation was 51.1 million ADS, representing 153.3 million ordinary shares.

"Operationally in the second quarter, we are pleased to report that all our facilities were online and continued to generate electrical power in accordance with their production specifications, that no material problems occurred with respect to grid connectivity and power transmission and our expenses that are classified as cost of revenue or general and administrative expenses were in line with expectations," Mr. Kuhns stated.

Liquidity

The Company's cash and cash equivalents as of June 30, 2011 amounted to $10.1 million compared to $33.5 million as of December 31, 2010, a decrease of $23.4 million. This decrease was principally attributable to the excess of cash flow used in investing activities of $21.4 million, principally consisting of acquisition-related payments, over cash provided by financing activities of $1.3 million. Cash provided by financing activities was adversely impacted by central government policy in effect during the current year period that effectively delayed new bank financing. Cash flow used in operating activities was $3.2 million for the six months ended June 30, 2011, which compares favorably to cash flow used in operating activities of $9.9 million in the prior year period. Cash flow provided by operating activities in the current period was unfavorably impacted by a $7.3 million decrease in adjusted EDITDA that resulted from lower revenue and profitability due to our relatively fixed expense levels, as well as working capital requirements.

Historically, the Company has partially relied on the ready availability of credit in China to fund its operations and expansion. However, during the first half of 2011, the Company's ability to obtain financing from its principal lender in China has been constrained by restrictions on bank lending imposed by the central government in an effort to contain inflation. While Management is of the view that this policy will likely end in the near term, there is no assurance that this will occur. As a result, as a precautionary step to best assure that it will be in a position to continue to meet working capital and debt service requirements through cash flow from operations, Management has commenced discussions with lenders about restructuring certain near term principal payments. Based on discussions to date, Management believes that the Company's lenders will agree to such a restructuring. In addition, assuming bank lending in China does not become less restrictive in the near term, Management expects to explore the possibility of raising additional debt and/or equity financing from alternative sources.

First Quarter Results:

• Q1 revenue decreased by 27% to $11.5 million.
• Q1 gross profit decreased by 61% to $4.1 million. Gross margin decreased by 31% to 36%.
• Q1 adjusted EBITDA (see reconciliation table) decreased by 44% to $6.0 million. Adjusted EBITDA margin was 52% vs. 68% first quarter last year.
• Q1 GAAP net loss attributable to ordinary shareholders was $5.6 million, or $0.11 net loss per American Depository Share ("ADS") (each representing three ordinary shares) compared to a loss of $13.5 million in Q1 2010, which included $15.8 million in non-cash charges.
• Q1 non-GAAP net loss (see reconciliation table) decreased to $4.4 million, or $0.09 net loss per ADS, from a non-GAAP income of $2.6 million in Q1 2010.

"Although as a result of differing weather conditions during the first quarter of 2011 versus the unusually favorable weather conditions during the first quarter of 2010, revenue and profitability are down from the prior year period, we are extremely pleased with our results for this period and are equally pleased to report all of our equipment is performing within designed utilization rate ranges in anticipation of the second and third quarters, which traditionally experience more rainfall than the first and fourth quarters. As a hydroelectric power producer, we are subject to seasonal variations in precipitation at each of our 26 operating projects spread across four different PRC provinces. In order to mitigate the possible risk of low rainfall in one region and to take advantage of two different weather systems in the PRC, we own and operate hydroelectric power projects in the eastern and western parts of China. Overall, our projects for the first three months of 2011 experienced less than average rainfall in Fujian and Zhejiang, while our projects in Yunnan and Sichuan experienced average rainfall, whereas in the first quarter of 2010 each province experienced better than average precipitation. While 2010 benefited from better than average rainfall, 2009 was adversely affected by below average rainfall," commented Mr. John D. Kuhns, Chief Executive Officer and Chairman of the Board of Directors of the Company. The impact of hydrological conditions, whereby precipitation in any given year could vary by about 25% above or below the mean, is something beyond the control of the Company.

Fourth Quarter Results:

• Q4 revenue increased by 75% to $10.0 million.
• Q4 gross profit increased by 2500% to $2.6 million. Gross margin increased by 25% to 26%.
• Q4 adjusted EBITDA (see reconciliation table) increased by 420% to $2.6 million. Adjusted EBITDA margin was 26% vs. 9% last year.
• Q4 GAAP net loss attributable to ordinary shareholders was $ 6.2 million, or $ 0.12 net loss per American Depository Share ("ADS") (each representing three ordinary shares) compared to a loss of $32.5 million in Q4 2009, which included$12.3 million in non-cash charges.
• Q4 non-GAAP net loss (see reconciliation table) decreased to $4.8 million, or $0.09 net loss per ADS, from a loss of $6.5 million in Q4 2009.

"We made significant progress from both an acquisition and operational perspective during 2010. We expanded our geographic diversification by acquiring five operating projects in Yunnan province plus five operating projects in Fujian, bringing a total of 172.2 MW of new capacity online, an increase of 46% year over year," commented Mr. John D. Kuhns, Chief Executive Officer and Chairman of the Board of Directors of the Company.

Third Quarter 2010 Financial and Operating Highlights

• Revenue increased by 42% to $18.4 millionfor the third quarter of 2010 compared to $13.0 million for the third quarter of 2009.
  
• Gross profit increased by 41% to $12.0 millionin the third quarter of 2010 compared to $8.5 million for the third quarter of 2009. Gross margin remained at 65% for the third quarter of 2010, the same as the third quarter of 2009.
  
• Operating income increased by 17% to $7.4 millionin the third quarter of 2010 compared to$6.3 millionin the third quarter of 2009.
  
• GAAP net income attributable to ordinary shareholders of $1.7 million, or $0.03 per American Depository Share ("ADS") (each representing three ordinary shares) for the third quarter of 2010 compared to GAAP net loss attributable to ordinary shareholders of $7.5 million for the same period in 2009. Net loss attributable to ordinary shareholders in the third quarter of 2009 was impacted by a non-cash charge of $8.8 million in cumulative dividends on the redeemable preferred shares outstanding in that period that were converted into ordinary shares at the time of the Company's IPO in January 2010.
  
• Non-GAAP net income (see the table entitled "GAAP Net Income (loss) to Non-GAAP Net Income (loss) Reconciliation" for detailed information) of $3.0 million, or $0.06 per ADS for the third quarter of 2010 compared to $1.5 million for the same period in 2009.

"We are pleased with the progress we continued to make in the third quarter of this year towards meeting our operational and acquisition goals for the year. The first half of 2010 saw favorable rainfall in most of our catchment areas, producing excellent runoff and a high level of reservoir storage at many of our projects. The third quarter continued to see favorable rainfall at our Fujian and Yunnan projects, while our Zhejiang projects saw slightly less than favorable rainfall. However, due to our geographic diversification, less than favorable rainfall in one region does not significantly impact our operations. However, the latter half of the year promises to be much drier than the first half."

"In the first nine months of this year, we expanded our geographic diversification by completing three acquisitions in Yunnan province of four operating projects, with a combined installed capacity totaling 116.8 MW," said Mr. John D. Kuhns, Chief Executive Officer and Chairman of the Board of Directors of the Company.

"For the remainder of 2010, we continue to expand our geographically diverse portfolio through the evaluation and acquisition of operational, construction and development hydroelectric projects in the PRC. We seek to continue to utilize our IPO proceeds, cash generated from operations, and funds expected to be available under the loan framework arrangement we have with the Bank of China's Fujian Branch to further expand our asset base."

Business Outlook for Full Year 2010

Although Yunnan and Fujian continued to experience favorable rainfall during the third quarter of 2010, less than favorable rainfall was realized in Zhejiang as a result of fewer than normal impacting typhoons. However, the impact that fourth quarter results will have on the Company's full year results remains uncertain at this time.

In addition to our 493.4 MW capacity as of September 30, 2010, as of today, we have signed definitive agreements to acquire the first five of seven Taiyu Projects, totaling 55.4 MW, as well as the Dazhaihe project, a 15 MW facility in Yunnan. Consummation of these two acquisitions is expected to be completed in November of 2010. Due to the length of bank financing processes, the remaining 44 MW to complete our overall 607.8 MW post IPO capacity target will likely be delayed until December 2010 or possibly the first quarter of 2011.