PURCHASE OF 20 A330-200 AIRCRAFT
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 LIMITED
(a joint stock limited company incorporated in the People's Republic of China
with limited liability)
(Stock Code: 753)
PURCHASE OF 20 A330-200 AIRCRAFT
MAJOR TRANSACTION
The Company hereby announces that on 26 January 2005 the Company and AIE entered
into an A330-200 Purchase Agreement with Airbus for the acquisition of 20 A330-
200 aircraft from Airbus.
CNAHC, which currently directly owns approximately 51.16% of the total issued
share capital of the Company, has approved the Transaction. CNAHC does not have
any interest in the Transaction other than as a shareholder of the Company.
The Transaction constitutes a major transaction of the Company under the Listing
Rules.
AIRCRAFT PURCHASE AGREEMENT
On 26 January 2005 the Company and AIE entered into an A330-200 Purchase
Agreement with Airbus, pursuant to which the Company has agreed to purchase 20
A330-200 aircraft from Airbus. In addition, the Board of the Company on the
same date has approved such acquisition. However, pursuant to Chinese
regulations the Transaction is conditional upon Chinese government approval,
which is not obtained yet.
The details of the Transaction are summarized as follows:
Date of the Transaction:
26 January 2005
Parties to the Transaction:
(i) the Company, as the purchaser, the principal business activity of which is
air passenger, air cargo and airline-related services;
(ii) AIE, as the import agent; and
(iii) Airbus, as the vendor, the principal business activity of which is
aircraft manufacturing.
The Company confirms that, to the best of the Directors' knowledge, information
and belief having made all reasonable enquiry, Airbus and each of the ultimate
beneficial owner of Airbus are independent third parties and not connected
persons (as defined in the Listing Rules) of the Company.
Aircraft to be Acquired:
20 A330-200 aircraft
Consideration:
According to the information provided by Airbus, the market price, as contained
in the catalog provided to the Company by Airbus, of the Airbus Aircraft in
aggregation is around US$2.86 billion. The aggregate consideration for the
Airbus Aircraft which is determined after arm's length negotiation between the
parties, is lower than the market price as contained in that Airbus catalog.
As the relevant consideration percentage ratio under Rule 14.07 of the Listing
Rules for the Transaction is above 25% but less than 100%, the Transaction
constitutes a major transaction and is therefore subject to approval by the
Company's shareholders under the Listing Rules.
Payment and Delivery Terms:
The aggregate consideration for the acquisition of Airbus Aircraft is payable by
cash in instalments. The Airbus Aircraft are expected to be delivered in stages
to the Company from mid 2006 to end 2008.
Source of Funding:
The Transaction will be funded through cash from the Company's operation and
commercial bank loans. No proceeds from the Company's recent global offering
will be used to finance this Transaction.
REASONS FOR AND BENEFITS OF THE TRANSACTION
The Airbus Aircraft will expand the fleet capacity of the Company and they will
principally serve the routes to international destinations in Europe, Australia,
North America and certain key domestic destinations such as Lhasa. The Airbus
Aircraft are expected to replace certain aircraft in the existing fleet of the
Company and will be able to provide more comfortable services to the passengers.
The Directors believe that the terms of the Transaction are fair and reasonable
and in the interests of the shareholders of the Company as a whole.
FURTHER INFORMATION
CNAHC currently directly owns approximately 51.16% of the total issued share
capital of the Company. Each of CNAHC and its associates (as defined in the
Listing Rules) does not have any interest in the Transaction other than as a
shareholder of the Company (where applicable). No shareholder of the Company is
required to abstain from voting if the Company were to convene a general meeting
for the approval of the Transaction. CNAHC has approved the Transaction by way
of a written approval pursuant to Rule 14.44 of the Listing Rules. The Company
shall, pursuant to the Listing Rules, send a circular containing the information
required under the Listing Rules in relation to the Transaction within 21 days
after the publication of this announcement.
DEFINITION
In this announcement, unless the context otherwise requires, the following terms
shall have the following meanings:
"AIE" Air China Group Import and Export Trading Co., a company
incorporated in the People's Republic of China and a wholly owned
subsidiary of the Company
"Airbus" Airbus S.A.S., a company incorporated in Toulouse, France
"Airbus Aircraft" 20 A330-200 aircraft to be purchased by the Company
pursuant to the A330-200 Purchase Agreement
"A330-200 Purchase Agreement " the aircraft acquisition agreement dated 26
January 2005 pursuant to which the Company has agreed to acquire
and Airbus has agreed to sell the Airbus Aircraft
"Board" the board of directors of the Company
"Company" Air China Limited, a company incorporated the People's
Republic of China with primary listing on The Stock Exchange of
Hong Kong Limited and secondary listing on the Official List of
the UK Listing Authority
"CNAHC" China National Aviation Holding Company, a company incorporated
in the People's Republic of China
"Director(s)" the director(s) of the Company
"Listing Rules" The Rules Governing the Listing of Securities on the Stock
Exchange of Hong Kong Limited
"Transaction" the acquisition by the Company of the Airbus Aircraft pursuant to
the A330-200 Purchase Agreement
By order of the Board
Air China Limited
Li Jiaxiang
Chairman
Beijing, 26 January 2005
As at the date of this announcement, the Directors of the Company are Messrs Li
Jiaxiang, Kong Dong, Wang Shixiang, Yao Weiting, Ma Xulun, Cai Jianjiang, Fan
Cheng, Hu Hung Lick, Henry, Wu Zhipan and Zhang Ke.
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