TIDMAIRC
RNS Number : 6945X
Air China Ld
27 April 2023
Hong Kong Exchanges and Clearing Limited and The Stock Exchange
of Hong Kong Limited take no responsibility for the contents of
this announcement, make no representation as to its accuracy or
completeness and expressly disclaim any liability whatsoever for
any loss howsoever arising from or in reliance upon the whole or
any part of the contents of this announcement.
AIR CHINA LIMITED
(a joint stock limited company incorporated in the People's
Republic of China with limited liability)
(Stock Code: 00753)
CONNECTED TRANSACTION
IN RELATION TO THE TRANSFER OF AIRCRAFT
I. INTRODUCTION
On 26 April 2023, the Company (as the seller) entered into the
Aircraft Sale and Purchase Agreement with Air China Cargo (as the
purchaser), pursuant to which the Company shall transfer to Air
China Cargo eight A330-200 aircraft which were introduced by the
Company during the period from 2006 to 2008.
II. THE AIRCRAFT SALE AND PURCHASE AGREEMENT
Principal terms of the Aircraft Sale and Purchase Agreement are
as follows: Date:
26 April 2023
Parties: (i) The Company (as the seller)
(ii) Air China Cargo (as the purchaser)
Aircraft to be transferred: eight A330-200 aircraft introduced by the Company during
the period from 2006 to 2008
Consideration: The base price of the aircraft to be transferred
shall be US$14.70 million per aircraft (the "Base Price "),
corresponding to a life benchmark of 50% of the life of the
aircraft, subject to the price adjustment mechanism for the
difference between the actual delivery condition and the half- life
condition of the aircraft. The actual consideration of the aircraft
shall be determined based on the Base Price and adjusted according
to the actual delivery condition of the aircraft. It is expected
that the average final consideration shall not exceed the Base
Price.
The above pricing policy is agreed upon arm's length negotiation
by both parties with reference to the market quotations from
independent third parties and ensuring the benefits of the
Shareholders.
Since the actual consideration of the aircraft shall be
determined upon the adjustment of the actual delivery condition,
the Directors expect that there will not be any significant gain or
loss accrued to the Company as a result of the above transactions.
If there is a significant difference between the actual
consideration of the aircraft and the Base Price, the Company will
re-comply with the announcement and/or other requirements under the
Hong Kong Listing Rules as soon as practicable.
Payment and Delivery: The purchaser shall pay for the total
consideration in
installments before the actual acceptance of the aircraft. The
consideration (excluding tax) of each aircraft shall be converted
into Renminbi at the exchange rate of the first business day of the
month in which the relevant aircraft is delivered.
The disposals of the eight A330-200 aircraft are scheduled to be
completed in tranches during the period from 2023 to 2025.
Conditions Precedent: The aircraft sale transaction shall be
subject to the satisfaction
or waiver by the relevant parties of the following conditions,
amongst others, set out in the Aircraft Sale and Purchase
Agreement.
(1) all flight activities of the aircraft to be transferred
shall stop and both parties shall carry on various activities
required for the delivery of the aircraft;
(2) the Company has title ownership of the aircraft to be
transferred and the aircraft to be transferred are free and clear
of any security interest;
(3) the aircraft to be transferred have complete and effective
standard airworthiness certificates for civil aircraft, nationality
registration certificates of civil aircraft and licenses for civil
aircraft radio stations issued by the Civil Aviation Administration
of China; and
(4) the Company shall receive a certificate of insurance
purchased by Air China Cargo for the aircraft to be transferred and
such insurance is in compliance with the Aircraft Sale and Purchase
Agreement, unless otherwise agreed by both parties.
III. REASONS FOR ENTERING INTO THE AIRCRAFT SALE AND PURCHASE
AGREEMENT AND THE EFFECTS ON THE COMPANY
By entering into the Aircraft Sale and Purchase Agreement, the
Company will dispose of the aircraft with relatively longer average
age to optimise the structure of the Group's aircraft fleet, and
effectively control delivery costs through a reasonable pricing
mechanism and optimised delivery terms, and improve the economic
benefits of aircraft disposal. For the above reasons,
the Directors (including independent non-executive Directors)
believe that although the Aircraft Sale and Purchase Agreement was
not entered into in the usual and ordinary course of business of
the Company, it was entered into on normal commercial terms and the
terms and conditions contained therein are fair and reasonable and
the transaction is in the interests of the Company and the
shareholders as a whole.
According to the 2022 annual audit, the aggregate book value of
the eight aircraft to be transferred by the Company under the
Aircraft Sale and Purchase Agreement was RMB1,182.8568 million as
of 31 December 2022. The actual consideration of the aircraft shall
be determined based on the Base Price and adjusted according to
actual delivery condition of the aircraft. Therefore, as at the
date of this announcement, the actual consideration of the aircraft
cannot be ascertained. However, it is expected that the average
final consideration shall not exceed the Base Price, i.e. US$14.70
million per aircraft. The actual gain (or loss) ultimately
recognized in the Company's financial statements will depend on,
amongst others, the actual costs and expenses in relation to the
transfer of the aircraft, the net book value of the relevant
aircraft as at the date of actual transfer and the Company's
comprehensive financial statements as audited by the Company's
auditors. Since the actual consideration of the aircraft shall be
determined upon the adjustment of the actual delivery condition,
the Directors expect that there will not be any significant gain or
loss accrued to the Company as a result of the above transactions.
Any proceeds will be used as working capital of the Company.
Mr. Ma Chongxian, Mr. Wang Mingyuan, Mr. Feng Gang, Mr. Patrick
Healy and Mr. Xiao Peng are considered to have material interests
in the transactions under the Aircraft Sale and Purchase Agreement,
and have therefore abstained from voting on the relevant Board
resolution. Save as mentioned above, no other Directors have
material interests in the Aircraft Sale and Purchase Agreement and
the transactions contemplated thereunder, and therefore no other
Directors are required to abstain from voting on the relevant Board
resolution.
IV. GENERAL INFORMATION
The Company
The Company is mainly engaged in providing air passenger
transport, air cargo and airline- related services.
Air China Cargo and CNAHC
Air China Cargo is owned as to approximately 45% by CNAHC, the
controlling shareholder of the Company, and is therefore a
connected person of the Company as defined under the Hong Kong
Listing Rules. Air China Cargo is a limited liability company
established under the laws of the PRC and is principally engaged in
air cargo and mail transportation business.
CNAHC directly holds 40.53% of the Company's shares and holds
9.61% of the Company's shares through its wholly-owned subsidiary
CNACG, and is the controlling shareholder of the Company as at the
date of this announcement. As at the date of this announcement, the
State- owned Assets Supervision and Administration Commission of
the State Council is a controlling shareholder and de facto
controller of CNAHC. CNAHC primarily operates all the state-owned
assets and state-owned equity interests invested by the State in
CNAHC and its invested entities, aircraft leasing and aviation
equipment and facilities maintenance businesses.
V. HONG KONG LISTING RULES IMPLICATIONS
Air China Cargo is a subsidiary of CNAHC, the controlling
shareholder of the Company, and is therefore a connected person of
the Company. The transaction contemplated under the Aircraft Sale
and Purchase Agreement constitutes a connected transaction of the
Company under Chapter 14A of the Hong Kong Listing Rules.
As one or more applicable Percentage Ratios for the transaction
contemplated under the Aircraft Sale and Purchase Agreement are
higher than 0.1% but all applicable Percentage Ratios are lower
than 5%, the above transaction is subject to the requirement for
reporting and announcement, but is exempted from the requirement
for independent shareholders' approval under Chapter 14A of the
Hong Kong Listing Rules.
VI. DEFINITION
In this announcement, unless the context otherwise requires, the
following expressions have the following meanings:
"Air China Cargo" Air China Cargo Co., Ltd., a company incorporated
under the laws of the PRC with limited liability
and is owned as to approximately 45% by
CNAHC as at the date of this announcement,
being a subsidiary of CNAHC. Air China Cargo
is principally engaged in air cargo and
mail transportation business
"Aircraft Sale and Purchase the agreement entered into between the Company
Agreement" and Air China Cargo on 26 April 2023 in
relation to the aircraft proposed to be
transferred by the Company
"Board" the board of Directors of the Company
"Company" Air China Limited, a company incorporated
in the PRC, whose H shares are listed on
the Hong Kong Stock Exchange as its primary
listing venue and on the Official List of
the UK Listing Authority as its secondary
listing venue, and whose A shares are listed
on the Shanghai Stock Exchange. The Company
is principally engaged in providing air
passenger, air cargo and airline-related
services
"CNAHC" China National Aviation Holding Corporation
Limited, a PRC state-owned enterprise and
the controlling shareholder of the Company,
directly and indirectly holding approximately
50.14% of the issued share capital of the
Company in aggregate as at the date of this
announcement
"connected person(s)" has the meaning ascribed to it under the
Hong Kong Listing Rules
"Director(s)" the director(s) of the Company
"Group" the Company and its subsidiaries (as defined
in the Hong Kong Listing Rules)
"Hong Kong Listing Rules" Rules Governing the Listing of Securities
on The Stock Exchange of Hong Kong Limited
"Percentage Ratio(s)" has the meaning ascribed to it under the
Hong Kong Listing Rules
"PRC" the People's Republic of China
"RMB" the lawful currency of the PRC
"US$" the lawful currency of the United States
of America
"%" per cent
By Order of the Board
Air China Limited
Huang Bin Huen Ho Yin
Joint Company Secretaries
Beijing, the PRC, 26 April 2023
As at the date of this announcement, the directors of the
Company are Mr. Ma Chongxian, Mr. Wang Mingyuan, Mr. Feng Gang, Mr.
Patrick Healy, Mr. Xiao Peng, Mr. Li Fushen*, Mr. He Yun*, Mr. Xu
Junxin* and Ms. Winnie Tam Wan-chi*.
* Independent non-executive director of the Company
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END
STREAPLXAESDEEA
(END) Dow Jones Newswires
April 27, 2023 04:08 ET (08:08 GMT)
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