UPDATE ON THE PROPOSED TRANSACTION
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.
中
AIR CHINA LIMITED
(a joint stock limited company incorporated in the People's Republic of China with limited liability)
(Stock Code: 00753)
INSIDE INFORMATION ANNOUNCEMENT UPDATE ON THE PROPOSED TRANSACTION
This announcement is made by Air China Limited (the "Company") pursuant to Rule 13.09 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules") and the Inside Information Provision under Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).
Reference is made to the announcement of the Company dated 30 May 2022 in relation to the planning by the Company to acquire the control of Shandong Aviation Group Company Limited ( 山 , "Shandong Aviation Group Corporation") and thereby acquiring the control of Shandong Airlines Co., Ltd. ( 山 , "Shandong Airlines").
ENTERING INTO OF THE FRAMEWORK AGREEMENT
On 14 June 2022, the Company, Shandong Aviation Group Corporation and Shansteel Financial Holdings Asset Management (Shenzhen) Company Limited ( 山 , "Shansteel Financial Holdings") entered into the framework agreement in relation to the transfer of equity interests and capital increase of Shandong Aviation Group Company Limited (the "Framework Agreement"). Pursuant to the Framework Agreement, the Company intends to acquire the equity interest of Shandong Aviation Group Corporation held by Shansteel Financial Holdings and to subscribe for the increased register capital of Shandong Aviation Group Corporation; the Company also intends to further communicate with other shareholders of Shandong Aviation Group Corporation and finalize the investment arrangement in Shandong Aviation Group Corporation. The Company intends to hold in aggregate no less than 66% of equity interest in Shandong Aviation Group Corporation and obtain control of Shandong Aviation Group Corporation through the aforesaid transactions (the "Proposed Transaction"). As of the date of this announcement, Shandong Aviation Group Corporation is held as to 1.41% by Shansteel Financial Holdings. Also, the Proposed Transaction will result in the Company's direct and indirect aggregate equity interest in Shandong Airlines exceeding 30% and, in accordance with the Regulations on the Takeover of Listed Companies (Order No. 10 issued by the CSRC), the Company should make a general offer to the shareholders of Shandong Airlines other than the Company and Shandong Aviation Group Corporation. Accordingly, the Company issued the Summary of the Report on the General Offer of Shandong Airlines Co., Ltd. 《 ( 山 ) to the shareholders of Shandong Airlines on 14 June 2022.
The Framework Agreement is only an agreement of intent. As of the date of this announcement, the Company has not completed due diligence, audit and valuation of Shandong Aviation Group Corporation, and the terms and conditions of the formal transaction documents have not yet been finalized. As of the date of this announcement, the valuation of Shandong Aviation Group Corporation has not been completed. The price of the equity transfer and capital increase of the Proposed Transaction will be determined by the relevant parties through negotiation based on Shandong Aviation Group Corporation's appraisal value filed with the competent state-owned assets supervision and administration authority.
For the Proposed Transaction, the parties shall complete the internal and external decision-making and approval procedures required for the Proposed Transaction and sign the formal transaction documents. There is a risk that the specific transaction proposal may not be agreed upon, the relevant parties may not be able to sign the formal transaction documents on time or the internal and external decision-making and approval procedures may not be completed, thereby resulting in the Proposed Transaction not being completed.
If the Proposed Transaction is materialized, Shandong Aviation Group Corporation, Shandong Airlines and their subsidiaries will become subsidiaries of the Company. After the Company takes control of Shandong Aviation Group Corporation and Shandong Airlines, the Company will be able to enhance its overall profitability by further strengthening market layout and deepening its cooperation with Shandong Aviation Group Corporation.
The Company will fulfill its disclosure obligations under the Listing Rules and the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) in a timely manner.
Shareholders and potential investors of the Company are advised to exercise caution when dealing in the securities of the Company.
By Order of the Board
Air China Limited Huang Bin Huen Ho Yin Joint Company Secretaries
Beijing, the PRC, 14 June 2022
As at the date of this announcement, the directors of the Company are Mr. Song Zhiyong, Mr. Ma Chongxian, Mr. Feng Gang, Mr. Patrick Healy, 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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