OFFERING-ADDITIONAL A SHARES
Air China Ld
01 November 2007
The Stock Exchange of Hong Kong Limited takes no responsibility for the contents
of this announcement, makes no representation as to its accuracy or completeness
and expressly disclaims any liability whatsoever for any loss whatsoever arising
from or in reliance upon the whole or any part of the contents of this
announcement.
AIR CHINA
(a joint stock limited company incorporated in the People's Republic of China
with limited liability)
(Stock Code: 753)
PROPOSED OFFERING OF ADDITIONAL A SHARES
At the meetings of the Board held on 30 October and 31 October 2007, the Board
resolved to authorize the Company to issue and offer not more than 400 million A
Shares representing approximately 5.10% of the A Shares and approximately 3.26%
of the total shares of the Company currently in issue, respectively, subject to
obtaining the necessary approvals from the shareholders of the Company at an
extraordinary general meeting to be convened and approvals from the relevant PRC
authorities.
The Company intends to utilize the proceeds from the Offering to part finance
the Company's acquisition of 15 Boeing 787 aircraft, 24 Airbus 320 series
aircraft and 15 Boeing 737 series aircraft and also to utilize up to RMB1.5
billion out of the proceeds to supplement the working capital of the Company.
The Offering and its details are subject to approval by the shareholders and
relevant PRC authorities. There is no assurance that the Offering will proceed.
Investors are advised to exercise caution in dealing in the H Shares. Further
details of the Offering will be disclosed by the Company when the Offering
materializes.
The Company hereby announces that at the meetings of the Board held on 30
October and 31 October 2007, the Board resolved to authorize the Company to
issue and offer not more than 400 million A Shares representing approximately
5.10% of the A Shares and approximately 3.26% of the total shares of the Company
currently in issue, respectively, subject to obtaining the necessary approvals
from the shareholders of the Company at an extraordinary general meeting to be
convened and approvals from the relevant PRC authorities.
1. General Information on the Offering
The Additional A Shares shall be offered to public investors in the PRC and
other investors as approved by the CSRC unless otherwise prohibited by
applicable laws, regulations and policies. The Offering will be conducted via a
combination of 'online' and 'offline' offerings (within the meaning of
relevant PRC laws and regulations), pursuant to which the Additional A Shares
will be offered through the trading system of the Shanghai Stock Exchange and
through placement by the underwriter for the Offering, respectively. The
Offering will contain two tranches, namely the Domestic Rights Issue and the
Domestic Public Offering (as defined below). Part of the Additional A Shares
under the Offering (the size of which is to be determined by the Board and the
lead underwriter for the Offering) will be made available to all registered
holders of A Shares, whose names appear on the register of members of the
Company on the Registration Date, on a pro rata basis in terms of the number of
A Shares which are not subject to lock-up as stipulated by the PRC laws and
regulations for their preferential subscription (the 'Domestic Rights Issue').
The remaining portion of the Additional A Shares and the portion not taken up
in the Domestic Rights Issue will be issued to public investors and other
investors as approved by the CSRC unless otherwise prohibited by applicable
laws, regulations and policies (the 'Domestic Public Offering'). The
actual size of the Domestic Rights Issue and the Domestic Public Offering will
be announced by the Company when it is determined in due course. According to
the proposed terms of the Offering, the Company expects that 6,206,678,909 A
Shares currently directly and indirectly held by the China National Aviation
Holding Company, the controlling shareholder of the Company, are not entitled to
participate in the Domestic Rights Issue as these shares are subject to a
three-year controller's lock-up until mid 2009 imposed by applicable PRC
regulations.
The Additional A Shares are expected to be listed on the Shanghai Stock
Exchange. The offer price of the Additional A Shares will be determined by the
agreement between the Board on behalf of the Company and the lead underwriter
for the Offering but in any event shall not be less than the lower of (i) the
average price of the existing shares of the Company for the 20 trading days
immediately prior to the publication of the offering document in respect of the
Offering; and (ii) the average price of the existing shares of the Company for
the trading day immediately prior to the publication of such offering document.
When determining the offer price, the view of prospective investors in the
securities markets will also be considered. Upon the completion of the Offering,
both existing and new shareholders of the Company will be entitled to the
accumulative distributable profits of the Company.
The Board proposes that the shareholders' approval of the Offering, if
granted at the EGM, shall be valid for 12 months from the date of the granting
the approval as long as the underlying general mandate continues in force or has
been renewed. The Board also proposes the EGM shall authorize the Board to
determine matters relating to the Offering at its discretion and with full
authority, including but not limited to the timing, exact amount of offer
shares, offering mechanism, pricing mechanism, offer price, scope of offerees
and allocation basis, etc.
2. Use of Proceeds
Assuming the completion of the Offering, the Company intends to utilize the
proceeds from the Offering to part finance the Proposed Projects and also to
utilize up to RMB1.5 billion out of the proceeds to supplement the working
capital of the Company.
The Board proposes that the proceeds from the Offering shall also be applied to
any payment due in relation to the Proposed Projects or to repay any outstanding
bank loan in relation to the Proposed Projects that occurred before the
completion of the Offering. The Board also proposes that the EGM shall authorize
the Board to determine the particular projects, priority and fund allocation
when applying the proceeds to the Proposed Projects.
The Company has entered into respective aircraft purchase agreement in
connection with the Proposed Projects. Further information on the purchases of
the 15 Boeing 787 aircraft, 15 Boeing 737 series aircraft and 24 Airbus 320
series aircraft of the Proposed Project is set out in the announcements made by
the Company dated 8 August 2005, 19 April 2006 and 14 June 2006, respectively.
The feasibility of the investment in the Proposed Projects by the proceeds from
the Offering and a special report on the use of proceeds from the previous issue
of shares by the Company will be proposed by the Board to the EGM for approval.
The Company believes that the Offering will provide the Company with funds
required for further increasing the operation capacity and strengthening the
core competency of the Company.
3. Shareholders' Approval at the EGM and Other Approvals
The shareholders of the Company have granted a general mandate (within the
meaning of the Hong Kong Listing Rules) to the Board at the annual general
meeting held on 30 May 2007. Pursuant to that general mandate, the Board has the
powers to allot and issue and deal with such amount of additional shares of the
Company that does not exceed 20% of each of the existing domestic shares and H
Shares in issue at the date of the grant of the general mandate. To date, the
Company has not issued any shares of the Company pursuant to the general
mandate. However, when the Board exercises the general mandate to issue the
Additional A Shares, the relevant PRC laws and regulations require that a
further shareholders' approval in respect of the Offering be given by way of
a special resolution at a shareholders' general meeting.
Accordingly, the EGM will be convened by the Company to approve matters relating
to the Offering as disclosed above. The notice of the EGM and a circular
containing details of the proposed Offering will be dispatched in due course.
It should be noted that, in addition to the approval being sought from the
shareholders of the Company, the Offering is also subject to approvals by the
CSRC and other relevant regulatory authorities including but not limited to the
approval by the Shanghai Stock Exchange as far as the listing of and dealings in
the Additional A Shares on the Shanghai Stock Exchange is concerned.
If any connected person of the Company (within the meaning of the Hong Kong
Listing Rules) subscribes any of the Additional A Shares under the Offering, the
Company will comply with the relevant requirements under the Hong Kong Listing
Rules.
4. Effect of the Offering on the Company's Shareholding Structure
The following table sets out the shareholding structure of the Company as at the
date of this announcement and immediately after the completion of the Offering,
assuming that in aggregate 400 million Additional A Shares are issued under the
Offering and no other change to the shareholding structure:
As at the date of this announcement Immediately after the completion of
the Offering
Number of Number of
shares in issue % shares in issue %
A Shares 7,845,678,909 64.04% 8,245,678,909 65.18%
H Shares 4,405,683,364 35.96% 4,405,683,364 34.82%
Total 12,251,362,273 100% 12,651,362,273 100%
The Offering and its details are subject to approval by the shareholders and
relevant PRC authorities. There is no assurance that the Offering will proceed.
Investors are advised to exercise caution in dealing in the H Shares. Further
details of the Offering will be disclosed by the Company when the Offering
materializes.
Definitions
'Additional A Shares' not more than 400 million A Shares
that the Board resolved to authorize the Company to issue and offer, subject to
obtaining the necessary approvals by the shareholders of the Company and
relevant PRC authorities
'A Shares' the ordinary shares in the
share capital of the Company with a nominal value of RMB1.00 each, which are
subscribed for and traded in RMB on the Shanghai Stock Exchange
'Board' the board of directors of the Company
'Company' Air China Limited
'CSRC' China Securities Regulatory Commission
'EGM' an extraordinary general meeting of the Company to be convened
'H Shares' overseas listed foreign shares in the share capital of the
Company which are listed on The Hong Kong Stock Exchange Limited and are
admitted to the Official List of the UK Listing Authority and are admitted for
trading on the market for listed securities of the London Stock Exchange
'Hong Kong
Listing Rules' Rules Governing the Listing of Securities on The Stock
Exchange of Hong Kong Limited
'Offering' the proposed issue and offering of the Additional A
Shares, more details of which are disclosed in this
announcement
'PRC' the People's Republic of China excluding, for the purpose
of this announcement only, Hong Kong, Macau and Taiwan
'Proposed Projects' the acquisition of 15 Boeing 787 aircraft, 24 Airbus 320
series aircraft and 15 Boeing 737 series aircraft by the Company, which the
Board proposes to apply the proceeds of the Offering to part finance
'Registration Date' the date for ascertaining the entitlement of such holders
of A Shares to apply for the Additional A Shares under the Offering on a
preferential basis, which will be determined and announced by the Company in due
course
By order of the Board
Huang Bin Li Man Kit
Joint Company Secretaries
Beijing, the PRC
31 October 2007
As at the date of this announcement, the Directors of the Company are Messrs Li
Jiaxiang, Kong Dong, Wang Shixiang, Yao Weiting, Christopher Dale Pratt, Chen
Nan Lok, Philip, Ma Xulun, Cai Jianjiang, Fan Cheng, Hu Hung Lick, Henry*, Wu
Zhipan*, Zhang Ke* and Jia Kang*.
* Independent non-executive Director of the Company
This information is provided by RNS
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