TIDMAIRC
RNS Number : 4335N
Air China Ld
09 May 2018
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
CONNECTED TRANSACTION AIRCRAFT FINANCE LEASE
AIRCRAFT FINANCE LEASE
On 8 May 2018, the Company entered into the Finance Lease Agreement with Beijing Leasing Company,
pursuant to which Beijing Leasing Company agreed to provide finance leasing to the Company
in relation to one Boeing B777-300ER aircraft in accordance with the terms and conditions
of the Finance Lease Agreement.
LISTING RULES IMPLICATIONS
Beijing Leasing Company is owned as to 60% and 40% by CNACG and Capital Holding respectively,
which in turn are wholly-owned subsidiaries of CNAHC, the controlling shareholder of the Company.
Therefore, Beijing Leasing Company is a connected person of the Company, and the Aircraft
Finance Lease constitutes a connected transaction of the Company under Chapter 14A of the
Listing Rules.
As one or more of the relevant applicable percentage ratios set out in the Listing Rules in
respect of the Aircraft Finance Lease is higher than 0.1% but less than 5%, the Aircraft Finance
Lease is subject to the reporting, annual review and announcement requirements but is exempt
from the shareholders' approval requirements under Chapter 14A of the Listing Rules.
---------------------------------------------------------------------------------------------------
INTRODUCTION
On 8 May 2018, the Company entered into the Finance Lease
Agreement with Beijing Leasing Company, pursuant to which Beijing
Leasing Company agreed to provide finance leasing to the Company in
relation to one Boeing B777-300ER aircraft in accordance with the
terms and conditions of the Finance Lease Agreement.
THE FINANCE LEASE AGREEMENT
Date : 8 May 2018
Lessor : Beijing Leasing Company
Lessee : The Company
Aircraft under Finance : One Boeing B777-300ER aircraft. According to
Lease the information provided by Boeing, the catalogue
price of Boeing B777-300ER aircraft is about
US$300 million.
Lease term : 10 years, commencing on the Delivery Date.
The lease term of the Finance Lease Agreement
shall be divided into consecutive rental periods,
and every six (6) months shall be a rental period
(the "Rental Period"). The first Rental Period
shall commence from the Delivery Date.
Principal amount : The principal amount under the Finance Lease
Agreement is the RMB equivalent of the Financing
Amount (i.e. US$100,000,000), calculated based
on the actual exchange rate of US$/RMB applicable
when Beijing Leasing Company purchases foreign
exchange in order to pay such Financing Amount
to the Boeing Company (the "RMB Financing Amount").
Rental fee and the : During the Rental Periods, the rental fee for
payment each Rental Period consists of the principal
and the interest. The total amount of the principal
is determined based on the RMB Financing Amount,
which shall be paid in equal amount of twenty
(20) periods from the Delivery Date. The principal
balance is amortized to zero when the lease term
expires.
Interest accrued for each Rental Period shall
be calculated based on the outstanding principal
balance on the first day of such Rental Period
multiplied by the applicable interest rate, in
accordance with the actual days of such Rental
Period on a 360- day year basis. The applicable
interest rate for the first Rental Period is
80% of the Benchmark Rate on the Delivery Date,
and the applicable interest rate for the remaining
Rental Periods is 80% of the Benchmark Rate on
the payment date of the rental fee for preceding
Rental Period. Beijing Leasing Company shall
provide the Company with the VAT special invoice
for the rental fee (including the principal and
the interest) no later than five (5) working
days before each payment date of the rental fee
or the payment date of the last payment, for
the Company to use for VAT deductions.
Based on the present applicable interest rate,
for a 10-year lease term, the total interest
under the Aircraft Finance Lease is expected
to be of no more than RMB150,000,000 (VAT inclusive).
Rental arrangement : The rental arrangement fee under the Finance
fee and the payment Lease Agreement is 0.5% of the Financing Amount,
and shall be paid by the Company to Beijing Leasing
Company in one lump sum prior to the Delivery
Date. The rental arrangement fee is estimated
to be of no more than US$500,000.
The Company may pay the rental arrangement fee
to Beijing Leasing Company in RMB, which shall
be the RMB equivalent of such rental arrangement
fee calculated based on the corporate exchange
rate of the Company for the month in which Beijing
Leasing Company issues the aircraft delivery
notice (the "RMB Rental Arrangement Fee"), and
shall be confirmed by the Company and Beijing
Leasing Company in writing. Beijing Leasing Company
shall provide the Company with the RMB Rental
Arrangement Fee payment notice and the VAT special
invoice no later than five (5) working days prior
to the date when the Company issues the aircraft
delivery notice.
Buy-back : Upon the expiry of the lease term of the Boeing
B777-300ER aircraft, the Company is entitled
to purchase such aircraft back from Beijing Leasing
Company at a buy-back price of RMB1.
Effectiveness : The Finance Lease Agreement is effective upon
execution by the legal representatives or authorised
representatives of the parties.
REASONS FOR AND BENEFITS OF ENTERING INTO THE FINANCE LEASE
AGREEMENT
The Aircraft Finance Lease has less impact on the Company's cash
flow, and helps reduce the Company's financing costs. Beijing
Leasing Company will issue VAT special invoice for the principal
and the interests, which can be used for VAT deductions. Comparing
with mortgage loans with same interest rates, it is estimated that
the Company will reduce its financing costs by no more than US$3
million.
The terms and conditions of the Aircraft Finance Lease is agreed
after arm's length negotiations between the parties. The Directors
(including the independent non-executive Directors) are of the view
that the Aircraft Finance Lease is on normal commercial terms, and
that the terms of the Aircraft Finance Lease are fair and
reasonable and in the interests of the Company and its shareholders
as a whole.
LISTING RULES IMPLICATIONS
Beijing Leasing Company is owned as to 60% and 40% by CNACG and
Capital Holding respectively, which in turn are wholly-owned
subsidiaries of CNAHC, the controlling shareholder of the Company.
Therefore, Beijing Leasing Company is a connected person of the
Company, and the Aircraft Finance Lease constitutes a connected
transaction of the Company under Chapter 14A of the Listing
Rules.
As one or more of the relevant applicable percentage ratios set
out in the Listing Rules in respect of the Aircraft Finance Lease
is higher than 0.1% but less than 5%, the Aircraft Finance Lease is
subject to the reporting, annual review and announcement
requirements but is exempt from the shareholders' approval
requirements under Chapter 14A of the Listing Rules.
Mr. Cai Jianjiang, Mr. Song Zhiyong and Mr. Xue Yasong, who are
also directors or senior management of CNAHC, are deemed to have
material interests in the transactions under the Finance Lease
Agreement, and have abstained from voting on the relevant
resolution at the Board meeting. Other than the Directors mentioned
above, none of the other Directors has a material interest in such
transactions.
GENERAL INFORMATION
The Company
The Company is incorporated in the PRC, whose H shares are
listed on the 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 principal business activity of the Company is air
passenger, air cargo and airline-related services.
Beijing Leasing Company
Beijing Leasing Company is a company incorporated in the PRC
with limited liability. Its registered capital is RMB1,000,000,000,
and its registered address is located at No. 8, Zhuyuan Road,
Shunyi District, Beijing, the PRC (Room 036, Floor 4, No. 4
Standard Factory Building, Tianzhu Comprehensive Bonded Zone). Its
legal representative is Mr. Wang Zhengang. The business scope of
Beijing Leasing Company is finance lease business, lease business,
purchase of leased properties from domestic and abroad, residual
value processing and maintenance of leased properties, leasing
transaction consulting and guarantee, import and export of goods,
import and export of technology, import and export of agency.
DEFINITIONS
In this announcement, unless the context otherwise requires, the
following expressions have the following meanings:
"Aircraft Finance Lease" the finance lease of the Boeing B777-300ER aircraft
pursuant to the Finance Lease Agreement
"Beijing Leasing Company" CNAC Beijing Financial Leasing Co., Ltd. (
), a company incorporated under the laws of
the PRC
with limited liability
"Benchmark Rate" the interest rate for RMB loan for above 5 years
prescribed and announced by the People's Bank
of China from time to time
"Board" the board of the Directors
"Boeing Company" Boeing Company, a company incorporated in the
State of Delaware of the United States of America
"Capital Holding" China National Aviation Capital Holding Co.,
Ltd. (
), a limited liability company incorporated
under laws
of the PRC and a wholly-owned subsidiary of CNAHC
as at the date of this announcement
"CNACG" China National Aviation Corporation (Group) Limited
(
), a company incorporated under the laws of
Hong Kong and a wholly-owned subsidiary of CNAHC
as at the date of this announcement
"CNAHC" China National Aviation Holding Corporation Limited
(
), a state-owned enterprise incorporated under
the laws of the PRC and the controlling shareholder
of the Company
"Company" Air China Limited, a company incorporated in
the PRC, whose H shares are listed on the Stock
Exchange as the primary listing venue and on
the Official List of the UK Listing Authority
as the secondary listing venue, and whose A shares
are listed on the Shanghai Stock Exchange
"connected person" has the meaning ascribed thereto under the Listing
Rules
"Delivery Date" the date on which Beijing Leasing Company delivers
the Boeing B777-300ER aircraft to the Company
pursuant to the Finance Lease Agreement
"Director(s)" the director(s) of the Company
"Finance Lease Agreement" the aircraft finance lease agreement entered
into between the Company and Beijing Leasing
Company on 8 May 2018, pursuant to which Beijing
Leasing Company agreed to provide finance leasing
to the Company in relation to one Boeing B777-300ER
aircraft in accordance with the terms and conditions
thereof
"Financing Amount" US$100,000,000
"Hong Kong" the Hong Kong Special Administrative Region of
the PRC
"Listing Rules" The Rules Governing the Listing of Securities
on The Stock Exchange of Hong Kong Limited
"RMB" Renminbi, the lawful currency of the PRC
"Stock Exchange" The Stock Exchange of Hong Kong Limited
"US$" United States dollars, the lawful currency of
the United States of America
By Order of the Board
Air China Limited
Zhou Feng Tam Shuit Mui
Joint Company Secretaries
Beijing, the PRC, 8 May 2018
As at the date of this announcement, the directors of the
Company are Mr. Cai Jianjiang, Mr. Song Zhiyong, Mr. John Robert
Slosar, Mr. Xue Yasong, Mr. Wang Xiaokang *, Mr. Liu Deheng*, Mr.
Stanley Hui Honchung* and Mr. Li Dajin*.
* Independent non-executive director of the Company
This information is provided by RNS
The company news service from the London Stock Exchange
END
TSTGDGDUXSGBGIC
(END) Dow Jones Newswires
May 09, 2018 02:00 ET (06:00 GMT)
Air China Ld (LSE:AIRC)
Historical Stock Chart
From Apr 2024 to May 2024
Air China Ld (LSE:AIRC)
Historical Stock Chart
From May 2023 to May 2024