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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
6-K
Report
of Foreign Private Issuer
Pursuant
to Rule 13a-16 or 15d-16
under
the Securities Exchange Act of 1934
For the
month of December 2010
Commission
File Number: 001-14550
China
Eastern Airlines Corporation Limited
Board
Secretariat’s Office
Kong Gang
San Lu, Number 88
Shanghai,
China 200335
Indicate
by check mark whether the registrant files or will file annual reports under
cover of Form 20-F or Form 40-F: x Form
20-F ¨ Form
40-F
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted
by Regulation S-T Rule 101(b)(1): ¨
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted
by Regulation S-T Rule 101(b)(7): ¨
Indicate
by check mark whether the registrant by furnishing the information contained in
this Form is also thereby furnishing the information to the Commission pursuant
to Rule 12g3-2(b) under the Securities Exchange Act of 1934: ¨ Yes x No
If "Yes"
is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): n/a
SIGNATURES
Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly
authorized.
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China Eastern Airlines Corporation
Limited
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(Registrant)
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Date
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December
20, 2010
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By
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/s/
Luo
Zhuping
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| Name: Luo Zhuping | ||||
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Title:
Director and Company
Secretary
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Certain
statements contained in this announcement may be regarded as "forward-looking
statements" within the meaning of the U.S. Securities Exchange Act of 1934, as
amended. Such forward-looking statements involve known and unknown
risks, uncertainties and other factors, which may cause the actual performance,
financial condition or results of operations of the Company to be materially
different from any future performance, financial condition or results of
operations implied by such forward-looking statements. Further
information regarding these risks, uncertainties and other factors is included
in the Company's filings with the U.S. Securities and Exchange
Commission. The forward-looking statements included in this
announcement represent the Company's views as of the date of this
announcement. While the Company anticipates that subsequent events
and developments may cause the Company's views to change, the Company
specifically disclaims any obligation to update these forward-looking
statements, unless required by applicable laws. These forward-looking
statements should not be relied upon as representing the Company's views as of
any date subsequent to the date of this announcement.
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.
(a joint stock limited company incorporated in the People’s Republic of China with limited liability)
(Stock code: 00670)
CONNECTED TRANSACTION
THE ACQUISITION OF BUSINESS AND ASSETS OF
GREAT WALL AIRLINES
On
20
December 2010, China Cargo Airlines, a subsidiary of the Company, as purchaser,
and Great Wall Airlines, as vendor, entered into the Agreement for the
acquisition of the Assets, being all valuable business carried on by, and all
valuable assets of, Great Wall Airlines, at RMB386,855,000 (equivalent to
HK$452,620,350) (subject to adjustments).
Since CEA
Holding is the controlling shareholder of the Company, Great Wall Airlines,
being a subsidiary of CEA Holding, is a connected person of the Company for the
purpose of the Listing Rules. Hence, the Acquisition constitutes a connected
transaction of the Company as defined under Rule 14A.13 of the Listing Rules. As
the highest percentage ratio among all applicable percentage ratios (as defined
in Rule 14.07 of the Listing Rules) in respect of the Acquisition is more than
0.1% but less than 5%, the Acquisition is only subject to the reporting and
announcement requirements and is exempt from the independent shareholders’
approval requirement under Chapter 14A of the Listing Rules. However, the
Acquisition is still subject to the approval by independent shareholders in
general meeting of the Company under the Shanghai Listing Rules. A notice of the
extraordinary general meeting of the Company containing details of the proposed
resolution for approving the Acquisition as required under the Shanghai Listing
Rules will be sent to the shareholders of the Company in due
course.
INTRODUCTION
On 20
December 2010, China Cargo Airlines, a subsidiary of the Company, as purchaser,
and Great Wall Airlines, as vendor, entered into the Agreement for the
acquisition of the Assets, being all valuable business carried on by, and all
valuable assets of, Great Wall Airlines, at RMB386,855,000 (equivalent to
HK$452,620,350) (subject to adjustments).
– 1
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THE AGREEMENT
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I.
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Date of the Agreement and the effective date of the Agreement
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The
Agreement is dated 20 December 2010 and it shall become effective on the date on
which all of following events have occurred:
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(i)
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the
Agreement has been signed and sealed by the respective authorised
representative of China Cargo Airlines and Great Wall
Airlines;
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(ii)
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the
Capital Increase (including the capitalisation from capital reserve) has
been approved by the Ministry of Commerce;
and
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(iii)
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a
new business licence has been issued to China Cargo Airlines
by the competent authority following the transformation of China
Car go Airlines into a foreign-invested enterprise
as a result of the Capital Increase.
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As event (i) has occurred, the Agreement shall become effective upon the occurrence of
events (ii) and (iii).
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II.
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Parties
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China Cargo
Airlines, as purchaser, and Great Wall Airlines, as vendor.
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III.
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Business
and assets to be acquired
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Great
Wall Airlines’ cargo air transportation business and the related assets,
including all relevant assets, liabilities, personnel and contracts, being all
valuable business carried on by, and all valuable assets of, Great Wall
Airlines.
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IV.
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Consideration
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The
Consideration is RMBM386,855,000 (equivalent to HK$452,620,350) (subject to the
adjustments set out below), of which:
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(i)
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RMB270,798,500
(equivalent to HK$316,834,245), being 70% of the Consideration (before
adjustments), shall be payable by China Cargo Airlines to Great Wall
Airlines on the Completion Date;
and
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(ii)
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the
remainder shall be payable by China Cargo Airlines to Great Wall Airlines
within 15 days from the date on which all of the following conditions have
been satisfied: (a) the issue of the Completion Accounts; (b) the
obtaining of the consents of all lessors of Great Wall Airlines’ leased
aircraft and creditors of Great Wall Airlines in respect of the
Acquisition; and (c) the completion of all necessary filing and
registration, and the obtaining of all relevant approvals, in respect of
the transfer of the Assets.
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The
Consideration shall be adjusted upwards by the profits, or downwards by the
losses, made by Great Wall Airlines during the period from the base date of the
Valuation Report (i.e. 30 June 2010) to the Completion Date as shown in the
Completion Accounts.
– 2
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V.
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Completion
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Completion
shall take place on the 10th business day (or such other date as agreed by the
China Cargo Airlines and Great Wall Airlines) after the delivery of the
completion notice by China Cargo Airlines to Great Wall Airlines. The completion
notice shall be deliverable within 3 business days after the satisfaction of all
of the following conditions:
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(i)
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the Agreement has became effective;
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(ii)
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the Agreement has been approved by the shareholders of China Cargo
Airlines;
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(iii)
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the Agreement has been approved
by the board of directors
of Great Wall Airlines; and
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(iv)
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the
completion of the filing and registration of the Valuation Report with the
State-owned Assets Supervision and Administration Commission of the
PRC.
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Great
Wall Airlines’ registered capital is RMB1,000,000,000 (equivalent to
approximately HK$1,170,000,000). The Consideration is determined with reference
to the net assets value of Great Wall Airlines in the Valuation Report. This
valuation adopts a cost approach and the base date of the Valuation Report is 30
June 2010. The book value of the net assets of Great Wall Airlines is
approximately RMB373,958,915 (equivalent to approximately HK$437,531,931) as at
30 June 2010 and the appraised value of the net assets of Great Wall Airlines is
RMB386,855,000 (equivalent to approximately HK$452,620,350) 30 June 2010, based
on the Valuation Report. The Consideration shall be paid out of China Cargo
Airlines’ internal resources.
REASONS FOR THE ACQUISTION
In
response to the PRC Government’s plans to revitalise the logistics industry and
to develop Shanghai as an aviation and shipping centre as well as an
international financial centre, the Acquisition will position China Cargo
Airlines as a key player of the PRC logistics industry and the development of
Shanghai as an aviation and shipping centre as well as an international
financial and shipping centre, thereby creating an aviation logistics enterprise
with international competitiveness. Hence, the Acquisition aligns with the
development strategy of the Company. It enhances China Cargo Airlines’
capability for sustainable development and avoids horizontal competition. It is
also in the interests of the Company and its shareholders as a whole and
beneficial to the long-term development of the Company.
Having
considered the above, the Directors (including the independent non-executive
Directors) are of the view that the Acquisition is on normal commercial terms
which are fair and reasonable and in the interests of the Company and its
shareholders as a whole.
INFORMATION ON THE COMPANY AND GREAT WALL AIRLINES
The Company
is principally engaged in the business of civil aviation.
– 3
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Great
Wall Airlines is a foreign-invested enterprise established in the PRC. Its scope
of operation includes (i) air transportation of cargoes and mails on
international and domestic routes; (ii) agency business among airlines; (iii)
service relating to air transportation of cargoes and mails; (iv) chartered
flight business; (v) logistics business; and (vi) cargo transportation and
storage service.
The
audited net loss of Great Wall Airlines (before and after taxation and
extraordinary items) for the two years ended 31 December 2009 are as
follows:
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Year ended 31
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Year ended 31
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December 2009
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December 2008
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(RMB)
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(RMB)
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Net loss before taxation
and extraordinary items
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177,300,000
(equivalent to
approximately
HK$207,441,000)
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208,880,300
(equivalent to
approximately
HK$244,389,951)
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Net loss after taxation
And extraordinary items
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177,300,000
(equivalent to
approximately
HK$207,441,000)
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208,880,300
(equivalent to
approximately
HK$244,389,951)
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LISTING RULES IMPLICATIONS
Since CEA
Holding is the controlling shareholder of the Company, Great Wall Airlines,
being a subsidiary of CEA Holding, is a connected person of the Company for the
purpose of the Listing Rules. Hence, the Acquisition constitutes a connected
transaction of the Company as defined under Rule 14A.13 of the Listing Rules. As
the highest percentage ratio among all applicable percentage ratios (as defined
in Rule 14.07 of the Listing Rules) in respect of the Acquisition is more than
0.1% but less than 5%, the Acquisition is only subject to the reporting and
announcement requirements and is exempt from the independent shareholders’
approval requirement under Chapter 14A of the Listing Rules. However, the
Acquisition is still subject to approval by the independent shareholders in
general meeting of the Company under the Shanghai Listing Rules. A notice of the
extraordinary general meeting of the Company containing details of the proposed
resolution for approving the Acquisition as required under the Shanghai Listing
Rules will be sent to the shareholders of the Company in due
course.
As Mr.
Liu Shaoyang (Director), Mr. Li Jun (Director) and Mr. Luo Chaogeng (Director)
are senior management of CEA Holding, they may be regarded as having a material
interest in the Acquisition. As such, they have abstained from voting at the
meeting of the Board convened for the purpose of approving the Acquisition. Save
as the aforementioned, none of the Directors has any material interests in the
Acquisition.
– 4
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DEFINITIONS
In this announcement, unless the
context otherwise requires, the following expressions have the following
meanings:
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“Acquisition”
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means
the acquisition of the Assets by China Cargo Airlines from Great Wall
Airlines;
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“Agreement”
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means
the asset acquisition agreement dated 20 December 2010 entered into
between China Cargo Airlines, as purchaser, and Great Wall Airlines, as
vendor, for the Acquisition;
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“Assets”
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means
Great Wall Airlines’ cargo air transportation business and the related
assets, including all relevant assets, liabilities, personnel and
contracts, being all valuable business carried on by, and all valuable
assets of, Great Wall Airlines;
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“Board”
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means
the board of the Directors;
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“Capital
Increase”
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means
the capital increase of China Cargo Airlines pursuant to a Capital
Increase Agreement dated 20 December 2010 entered into among the Company,
COSCO Group, Concord Pacific Limited and Singapore Airlines Cargo Pte
Ltd., as a result of which China Cargo Airlines will become a
foreign-invested enterprise;
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“CEA
Holding”
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means
中國東方航空集團公司 (China
Eastern Air Holding Company), a wholly PRC state-owned enterprise and the
controlling shareholder of the Company;
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“China
Cargo Airlines”
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means
中國貨運航空有限公司,
China Cargo Airlines Co., Ltd., a limited liability company established in
the PRC owned as to 70% by the Company;
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“Company”
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means
中國東方航空股份有限公司 (China
Eastern Airlines Corporation Limited), a joint stock limited company
incorporated in the PRC with limited liability, whose H shares, A shares
and American depositary shares are listed on the Stock Exchange, the
Shanghai Stock Exchange and the New York Stock Exchange, Inc.,
respectively;
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“Completion
Accounts”
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means
the accounts of Great Wall Airlines for the period between the base date
of the Valuation Report (i.e. 30 June 2010) and the Completion Date
prepared by a registered accountant of the PRC, who shall be jointly
appointed by China Cargo Airlines and Great Wall
airlines;
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– 5
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“Completion
Date”
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means
the date of the completion of the Agreement;
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“Consideration”
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means
the consideration for the Acquisition payable by China Cargo Airlines to
Great Wall Airlines under the Agreement;
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“Directors”
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means
the directors of the Company;
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“Great
Wall Airlines”
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means
長城航空有限公司 , Great Wall
Airlines, a foreign-invested enterprise established in the PRC owned as to
51% by CEA Holding;
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“Hong
Kong”
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means
Hong Kong Special Administrative Region of the PRC;
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“Listing
Rules”
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means
the Rules Governing the Listing of Securities on The Stock Exchange of
Hong Kong Limited;
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“PRC”
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means
the People’s Republic of China excluding, for the purpose of this
announcement only, Hong Kong, the Macau Special Administrative Region of
the PRC and Taiwan;
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“RMB”
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means
Renminbi, the lawful currency of the PRC;
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“Shanghai
Listing Rules”
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means
the Rules Governing Listing of Securities on the Stock Exchange of
Shanghai;
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“Stock
Exchange”
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means
The Stock Exchange of Hong Kong Limited; and
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“Valuation
Report”
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means
the asset valuation report on Great Wall Airlines dated 17 December 2010
prepared by Zhong Tong Cheng Ev aluation Limited*, 中通誠資產有限公司 , an asset
evaluation company appointed by Great Wall
Airlines.
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For
the purpose of this announcement, translations of RMB into Hong Kong dollars are
made for illustration purposes only at the exchange rate of HK$1.17 to
RMB1.00.
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By
order of the Board
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CHINA
EASTERN AIRLINES CORPORATION LIMITED
Luo
Zhuping
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Director
and Company
Secretary
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*
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For
identification purpose only.
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– 6
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The
directors of the Company as at the date of this announcement are:
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Liu
Shaoyong
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(Chairman)
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Li
Jun
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(Vice
Chairman)
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Ma
Xulun
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(Director,
President)
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Luo
Chaogeng
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(Director)
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Luo
Zhuping
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(Director,
Company Secretary)
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Sandy
Ke-Yaw Liu
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(Independent
Non-executive Director)
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Wu
Xiaogen
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(Independent
Non-executive Director)
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Ji
Weidong
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(Independent
Non-executive Director)
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Shao
Ruiqing
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(Independent
Non-executive Director)
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Shanghai,
the PRC
20
December 2010
– 7
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