Purchase of B787
Air China Ld
09 August 2005
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)
(1) MAJOR TRANSACTION: PURCHASE OF 15 BOEING 787 AIRCRAFT
AND
(2) RESUMPTION OF TRADING
The Company hereby announces that on 8 August 2005 the Company and AIE entered
into the Boeing Aircraft Purchase Agreement with Boeing Company, pursuant to
which the Company has agreed to purchase 15 Boeing 787 aircraft from Boeing
Company.
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. At the request of the Company, trading in the shares of the Company on
the Hong Kong Stock Exchange was suspended with effect from 12:01 p.m. on 8
August 2005 pending the release of this announcement. The Company has applied
to the Hong Kong Stock Exchange for resumption of trading in the shares of the
Company with effect from 9:30 a.m. on 9 August 2005.
BOEING AIRCRAFT PURCHASE AGREEMENT
On 28 January 2005 the Company announced that a framework agreement had been
entered into between the Company, other Contracting Chinese Airlines, CASGC, and
Boeing Company in respect of the intent of the Contracting Chinese Airlines to
purchase certain Boeing 7E7 aircraft from Boeing Company.
The Company hereby announces that on 8 August 2005 the Company and AIE entered
into the Boeing Aircraft Purchase Agreement with Boeing Company, pursuant to
which the Company has agreed to purchase 15 Boeing 787 (which was formerly known
as Boeing 7E7) aircraft from Boeing Company.
The details of the Transaction are summarized as follows:
Date of the Transaction:
8 August 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 for the Company; and
(iii) Boeing Company, as the vendor, one of whose principal business
activity is aircraft manufacturing.
The Company confirms that, to the best of the Directors' knowledge,
information and belief having made all reasonable enquiry, Boeing Company and
each of the ultimate beneficial owner of Boeing Company are independent third
parties and not connected persons (as defined in the Listing Rules) of the
Company.
Aircraft to be acquired:
Boeing Aircraft, i.e.15 Boeing 787 aircraft
Consideration:
According to the information provided to the Company by Boeing Company, the
catalog price of the Boeing Aircraft in aggregate is approximately US$2.16
billion. The aggregate consideration payable for the Boeing Aircraft, which is
determined after arm's length negotiation between the parties, is lower than
such catalog price.
As the relevant 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 Boeing Aircraft is payable by
cash in instalments. The Company is expecting to take delivery of the Boeing
Aircraft in stages from mid 2008 to end 2010.
Source of funding:
The Transaction will be funded through cash generated from the Company's
business operations, commercial bank loans and other debt instruments of the
Company. No proceeds from the Company's global offering in December 2004 will
be used to finance the Transaction.
REASONS FOR AND BENEFITS OF THE TRANSACTION
The Boeing Aircraft will expand the fleet capacity of the Company and they will
principally serve long distance international destinations in North America,
Europe and Australia. The Company expects the Boeing Aircraft will deliver more
cost-efficient performance and provide more comfortable services to 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 was 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, dispatch a circular containing the
information required under the Listing Rules in relation to the Transaction
within 21 days after the publication of this announcement.
SUSPENSION AND RESUMPTION OF TRADING
At the request of the Company, trading in the shares of the Company on the Hong
Kong Stock Exchange was suspended with effect from 12:01 p.m. on 8 August 2005
pending the release of this announcement. The Company has applied to the Hong
Kong Stock Exchange for resumption of trading in the shares of the Company with
effect from 9:30 a.m. on 9 August 2005.
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
'Boeing Aircraft' 15 Boeing 787 aircraft to be purchased by the Company pursuant to the Boeing
Aircraft Purchase Agreement
'Boeing Aircraft Purchase Agreement' the aircraft purchase agreement dated 8 August 2005 pursuant to which the
Company has agreed to purchase and Boeing Company has agreed to sell the Boeing
Aircraft
'Boeing Company' Boeing Company, a company incorporated in Delaware of the United States
'CASGC' China Aviation Supplies Import and Export Group Corporation, a company
incorporated in the People's Republic of China
'Company' Air China Limited, a company incorporated in 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
'Contracting Chinese Airlines' several major Chinese airline companies, including, among others, the Company,
China Eastern Airlines Corporation Limited and China Southern Airlines Company
Limited, which are parties to a framework agreement with Boeing Company dated
28 January 2005 in respect of the intent of purchase of certain Boeing 7E7
aircraft
'CNAHC' China National Aviation Holding Company, a company incorporated in the People's
Republic of China
'Director(s)' the director(s) of the Company
'Hong Kong Stock Exchange' The Stock Exchange of Hong Kong Limited
'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 Boeing Aircraft pursuant to the Boeing
Aircraft Purchase Agreement
By order of the Board
Air China Limited
Zheng Baoan Li Man Kit
Joint Company Secretaries
Beijing, 8 August 2005
As at the date of this announcement, the Directors of the Company are Messrs Li
Jiaxiang, Kong Dong, Wang Shixiang, Yao Weiting, David Muir Turnbull, Ma Xulun,
Cai Jianjiang, Fan Cheng, Hu Hung Lick, Henry*, Wu Zhipan* and Zhang Ke*.
*Independent non-executive Director of the Company
This information is provided by RNS
The company news service from the London Stock Exchange
Latest directors dealings
- 5 hours ago Johnson Matthey
- 6 hours ago Galliford Try
- 6 hours ago Galliford Try
- 6 hours ago Centrica
- 7 hours ago Smith & Nephew