DISCLOSEABLE TRANSACTION AND CONNECTED TRANSACTION

RNS Number : 4861Z

Air China Ld

31 August 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.

中國國際航空股份有限公司

AIR CHINA LIMITED

(a joint stock limited company incorporated in the People’s Republic of China with limited liability)

(Stock Code: 00753)

DISCLOSEABLE TRANSACTION AND CONNECTED TRANSACTION:

SALE OF 51% EQUITY INTEREST IN AIR CHINA CARGO

 

 

SALE OF 51% EQUITY INTEREST IN AIR CHINA CARGO

On 30 August 2018, the Company entered into the Disposal Agreement with Capital Holding, pursuant to which the Company conditionally agreed to sell and Capital Holding conditionally agreed to purchase 51% equity interest in Air China Cargo at a consideration of RMB2,438,837,520. Upon completion of the Disposal, Air China Cargo will cease to be a subsidiary of the Company.

HONG KONG LISTING RULES IMPLICATIONS

As at the date of this announcement, Capital Holding is a wholly-owned subsidiary of CNAHC, the controlling shareholder of the Company, and is therefore a connected person of the Company as defined under the Hong Kong Listing Rules.

As one or more of the applicable Percentage Ratios of the Disposal is more than 5% but are all less than 25%, the Disposal constitutes a discloseable transaction and a connected transaction of the Company and is therefore subject to the reporting, announcement and independent shareholders' approval requirements under Chapter 14A of the Hong Kong Listing Rules and the requirements applicable to discloseable transaction under Chapter 14 of the Hong Kong Listing Rules.

EXTRAORDINARY GENERAL MEETING

The Company will convene an extraordinary general meeting for the purpose of, among other things, obtaining Independent Shareholders' approval for the Disposal Agreement and the transactions contemplated thereunder. CNAHC and its associates will abstain from voting on the relevant resolution at the extraordinary general meeting.

The Independent Board Committee comprising all independent non-executive Directors has been set up to advise the Independent Shareholders in respect of the Disposal Agreement and the transactions contemplated thereunder. Octal Capital has been appointed as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in this regard.

A circular containing, among other things, (i) details of the Disposal Agreement and the transactions contemplated thereunder; (ii) a letter from Octal Capital to the Independent Board Committee and the Independent Shareholders containing its advice on the Disposal Agreement and the transactions contemplated thereunder; and (iii) the recommendation of the Independent Board Committee in respect of the Disposal Agreement and the transactions contemplated thereunder, will be despatched to Shareholders on or about 4 September 2018 in accordance with the Hong Kong Listing Rules.

I.       INTRODUCTION

On 30 August 2018, the Company entered into the Disposal Agreement with Capital Holding, pursuant to which the Company conditionally agreed to sell and Capital Holding conditionally agreed to purchase 51% equity interest in Air China Cargo at a consideration of RMB2,438,837,520. Upon completion of the Disposal, Air China Cargo will cease to be a subsidiary of the Company.

II.      SALE OF 51% EQUITY INTEREST IN AIR CHINA CARGO

1.         Disposal Agreement

The principal terms of the Disposal Agreement are set out as follows:

Date

30 August 2018

Parties

Seller:          the Company

Purchaser: Capital Holding, a wholly-owned subsidiary of CNAHC

Assets to be sold

Subject to terms and conditions under the Disposal Agreement, the Company conditionally agreed to sell and Capital Holding conditionally agreed to purchase 51% equity interest in Air China Cargo at a consideration of RMB2,438,837,520. Upon completion of the Disposal, Air China Cargo will cease to be a subsidiary of the Company.

Consideration

The Consideration is RMB2,438,837,520, determined by the parties after arm's length negotiations with reference to the appraised value of the total shareholders' equity of 51% equity interest in Air China Cargo as at the Valuation Benchmark Date, being RMB2,438,837,520. The appraised value of Air China Cargo as at the Valuation Benchmark Date is prepared by the Valuer based on the valuation results using the asset- based approach.

Payment of Consideration

Subject to the satisfaction or waiver by Capital Holding in writing of all conditions for the payment of the Consideration, the Consideration shall be paid by Capital Holding within five (5) Working Days from the effective date of the Disposal Agreement by transferring it into the designated account of the Company.

If Capital Holding fails to complete the payment of the Consideration within five (5) Working Days from the effective date of the Disposal Agreement, the Company is entitled to receive penalty interest from Capital Holding from the date of the overdue of the payment to the date where the Consideration is fully paid. The penalty interest shall be calculated based on the part of the Consideration that has not been actually paid and the bank loan interest rate for the same period.

Conditions Precedent of the Payment of the Consideration

Capital Holding's payment of the Consideration shall be conditional upon the following conditions being fulfilled or waived in writing by Capital Holding:

(i)                Air China Cargo, the Company and Capital Holding have performed all necessary internal approval procedures, including but not limited to the approval by the board of directors, the shareholders' meeting, president work meeting (general manager work meeting) and other internal decision-making organs;

(ii)               CNAHC has performed all necessary internal approval procedures and has approved the Disposal to be conducted through non-public transfer by way of agreement, and has filed the appraisal result of Air China Cargo according to relevant laws and regulations;

(iii)               Other shareholders of Air China Cargo have waived their pre-emptive right and tag- along right in relation to the Disposal and have agreed with the implementation of the Disposal;

(iv)             the Disposal Agreement has been duly signed by the Company and Capital Holding and all the effective conditions as stipulated in the Disposal Agreement have been met, and the Disposal Agreement is legally binding on the parties thereunder; and

(v)              the Company's undertakings, representations and warranties under the Disposal Agreement are truthful, accurate and effectively honoured in material respects.

Conditions (ii) and (iii) are non-waivable. As at the date of this announcement, condition

(ii) has been satisfied.

Air China Cargo's "Other Shareholders" are Cathay Pacific China Cargo Holdings Limited (a subsidiary of Cathay Pacific) and Fine Star Enterprises Corporation, which hold 25% and 24% of equity interests in Air China Cargo, respectively. According to Air China Cargo's Joint Venture Contract and articles of association, should the Company dispose of its equity interests in Air China Cargo, the other shareholders of Air China Cargo shall be entitled to pre-emptive and tag-along rights. Where the other shareholders of Air China Cargo decide to exercise the pre-emptive right, they shall purchase all of the equity interests disposed of by the Company, and if they decide to exercise the tag-along right, they shall follow the Company and dispose of all their equity interests in Air China Cargo. In the event that the other shareholders of Air China Cargo exercise the pre- emptive right or tag-along right, the non-waivable condition (iii) will not be attainable, the conditions precedent of the payment of the consideration will not be entirely satisfied, and the Disposal will not be able to proceed.

Applications for Approvals from Government Authorities

The Company shall, within five (5) Working Days from the date of signing of the Disposal Agreement, procure Air China Cargo to submit the applications for approvals of the share transfer and the related application documents to government authorities including the Ministry of Commerce and the industrial authorities to obtain their approvals. After Air China Cargo has obtained the approvals from the Shareholders at the general meeting of the Company, the industrial authorities, and the Ministry of Commerce and after obtaining the new certificate of approval for establishment of enterprises with foreign investment, the Company shall actively procure Air China Cargo to apply for change of registration with industrial and commercial administration authority.

Capital Holding shall provide necessary assistance in the above-mentioned applications for approvals from government authorities.

Completion

The completion of the Disposal shall take place on the date when Air China Cargo completes the registration of change of the equity transfer with industrial and commercial administration authority in relation to the Disposal and obtains the new business license (the "Completion Date").

Miscellaneous

For the entrusted loans of RMB1.02 billion provided by the Company to Air China Cargo through the finance company controlled by the Company and for the loans of RMB0.98 billion provided by Cathay Pacific to Air China Cargo, the two parties agreed that Air China Cargo shall repay such loans in full before the Completion Date, and the Company shall procure the directors appointed by it at the board of directors of Air China Cargo to vote for the relevant resolution at the board meeting of Air China Cargo and sign the relevant board resolution.

For the existing guarantees and counter-guarantees provided by the Company before the Completion Date for Air China Cargo for the financing matters related to eight aircraft, the parties agreed that CNAHC will enter into relevant guarantee or counter-guarantee agreements (the "Replacement Guarantee Agreement") before the Completion Date with the relevant parties to provide such guarantees or counter-guarantees in lieu of the Company for relevant creditors or beneficiaries. Replacement Guarantee Agreements shall be signed and executed as agreed by relevant parties and shall be performed by the parties to the Replacement Guarantee Agreements in accordance with the agreed terms and conditions thereof. The Company and Capital Holding undertake that the financial and business operations of Air China Cargo will not be adversely affected by the signing and performance of the Replacement Guarantee Agreements. To avoid any doubt, taxes and fees arising from the signing of the Replacement Guarantee Agreements by relevant parties shall be borne in accordance with the terms of the Replacement Guarantee Agreements or the requirements of relevant laws.

Air China Cargo borrowed funds from the Beijing Capital International Airport Branch of Bank of China Limited in 2017 to replace the loans used to purchase aircraft. The Company provided guarantee for Air China Cargo for 51% (in line with the Company's shareholding percentage in Air China Cargo) of the debts under the borrowings. As at 31 December 2017, the Company's guarantee amount under such guarantee was approximately USD121,794 thousand (equal to approximately RMB795,826.35 thousand as per the Applicable Exchange Rate). In addition, Air China Cargo conducted overseas aircraft finance leasing in 2014 and 2015. The Company provided counter guarantee for 51% (in line with the Company's shareholding percentage in Air China Cargo) of such aircraft finance leasing. As at 31 December 2017, the Company's guarantee amount under such guarantee was approximately USD290,022 thousand (equal to approximately RMB1,895,061.75 thousand as per the Applicable Exchange Rate). The Company is not expected to incur additional taxes and fees for entering into Replacement Guarantee Agreements.

The Company agreed to provide Air China Cargo with trademarks and logos relating to its air cargo business after the Completion Date in accordance with the stipulations in the trademark licensing agreement that the Company has signed or will sign separately with CNAHC (or Air China Cargo). The Company and CNAHC have entered into a trademark license framework agreement (the "Framework Agreement") which was renewed in 2017 upon approval of independent shareholders with a term commencing on 1 January 2018 and ending on 31 December 2020. For trademarks covered by the Framework Agreement, the Company will authorize Air China Cargo to use them in accordance with the terms of the Framework Agreement; where the trademark authorization surpasses the scope of the Framework Agreement, the Company will otherwise enter into related connected transaction agreements with Air China Cargo or CNAHC, in which case the Company will comply with the requirements under Chapter 14A of the Hong Kong Listing Rules.

From the Completion Date, the directors, supervisors, or members of the executive committee of Air China Cargo appointed by the Company to Air China Cargo will become invalid and the corresponding positions will be filled by the personnel appointed by Capital Holding. If any of the directors, supervisors, or members of the executive committee of Air China Cargo appointed by the Company resign as directors, supervisors, or members of the executive committee of Air China Cargo due to the Disposal, the Company shall procure that such directors, supervisors, or members of the executive committee sign written letter of resignation and expressly waive the right of compensation against Air China Cargo due to their resignation as directors, supervisors, or members of the executive committee or any other reasons.

Effectiveness of the Disposal Agreement

The Disposal Agreement shall take effect upon all of the following conditions being fulfilled:

(i)                the Disposal Agreement has been duly signed by the legal representatives or authorized representatives of the Company and Capital Holding;

(ii)               the Disposal has been approved at the general meeting of the Company; and

(iii)               Air China Cargo has obtained approval from CNAHC, industrial authorities (namely the Civil Aviation Administration of China and/or the CAAC North China Regional Administration) and the Ministry of Commerce in respect of the Disposal.

Termination of the Disposal Agreement

In the event of any of the following circumstances, parties to the Disposal Agreement can terminate the Disposal Agreement by entering into a termination agreement in writing:

(i)                Due to force majeure events, this agreement cannot be performed;

(ii)               Due to unilateral breach of contract, the performance of the Disposal Agreement is rendered unnecessary or non-feasible;

(iii)               Air China Cargo fails to complete the registration of change of the equity transfer with industrial and commercial administration authority within one hundred fifty (150) days starting from the day when a share transfer notice has been sent by the Company to other shareholders of Air China Cargo; or

(iv)             The parties of the Disposal Agreement agree to terminate the Disposal Agreement.

2.         Information on Air China Cargo

Air China Cargo is a limited liability company incorporated under laws of the PRC, and its principal business is air cargo and airmail transportation.

The table below illustrates the consolidated net assets and total assets of Air China Cargo prepared according to Accounting Standards for Business Enterprises as at the dates indicated:

	30 June 2018	31 December 2017	31 December 2016
	(unaudited)	(audited)	(audited)
	RMB	RMB	RMB
Net Assets	3,960,695,819.93	3,841,902,754	2,739,476,828
Total Assets	14,726,820,488.54	14,240,736,144	14,635,366,376

The consolidated revenue and consolidated net profit (before and after taxation) of Air China Cargo for the two years ended 31 December 2017 and the six months ended 30 June 2018, prepared according to Accounting Standards for Business Enterprises, were as follows:

	For the six months ended 30 June 2018	For the year ended 31 December 2017	For the year ended 31 December 2016
	(unaudited) RMB	(audited) RMB	(audited) RMB
Revenue	5,557,842,322.32	11,263,786,156	9,022,882,585
Net profit (before taxation)	119,749,294.28	1,106,806,659	13,705,089
Net profit (after taxation)	118,747,804.44	1,104,645,196	12,031,834

Air China Cargo's net profit after tax (unaudited) for the six months ended 30 June 2018 was RMB118.75 million, representing a decrease of 58.07% from RMB283.22 million for the same period last year, mainly due to the increase in jet oil price and exchange loss despite the growth of revenue from cargo transportation.

Note: the above financial information is derived from the consolidated financial statements of Air China Cargo.

3.         Information on the Parties

The Company

The Company's principal business activity is air passenger, air cargo and airline-related services.

Capital Holding and CNAHC

Capital Holding is a company incorporated under laws of the PRC with limited liability, and also a wholly-owned subsidiary of CNAHC. It is primarily engaged in project investment, investment management, provision of investment advisory services, asset management, enterprise management, consultancy services in relation to asset management and enterprise management, charter services, lease of aircraft, sale of aviation supplies, and development and sale of computer software and hardware.

CNAHC is a state-owned company incorporated in the PRC with a registered capital of RMB10,027,830,000. Its registered address is Air China Plaza, 36 Xiaoyun Road, Chaoyang District, Beijing, the PRC and the legal representative is Mr. Cai Jianjiang. It is primarily engaged in managing its state-owned assets and its equity interest in investees, charter of aircraft and maintenance of aviation equipment. CNAHC is the controlling shareholder of the Company and is therefore a connected person of the Company as defined under the Hong Kong Listing Rules.

4.         Financial Impact of the Disposal

Assuming the Company sets 30 June 2018 as the benchmark date for completion of the Disposal, it is expected that the financial statements of the Company prepared according to the Accounting Standards for Business Enterprises will record a gain before taxation of approximately RMB411 million as a result of the Disposal, which represents the difference between the Consideration and the unaudited net asset value of 51% equity interest in Air China Cargo amounting to RMB2,028 million as at 30 June 2018 based on the consolidated financial statements of the Company.

The actual gain or loss in connection with the Disposal will be assessed after the completion of the Disposal. As Air China Cargo's net assets will change on the Completion Date, the actual gain from the Disposal will be adjusted accordingly based on Air China Cargo's net assets on the Completion Date. Upon completion of Disposal, Air China Cargo will cease to be a subsidiary of the Company and the financial results of Air China Cargo will no longer be consolidated into the financial statements of the Company.

The proceeds from the Disposal in the total sum of RMB2,438,837,520 will be used to replenish the liquidity of the Group.

5.         Reasons for and Benefits of the Disposal

(i)                Enhancing the stability of the Company's operation

In recent years, the capacity of the air cargo transportation market has been oversupplied. Market competition was fierce, the cargo transportation price was low, and the market was highly open. In the domestic market, the traditional air cargo businesses do not fully match the rapidly changing domestic logistics needs, and the competition in freight market has increased. In the international market, despite the increase in international cargo transportation volume in 2017, the entire industry is faced with increasingly complex international trade situation and exchange rate risks, leading to increased uncertainty in the prospect of the international cargo transportation market.

Against this industry backdrop, Air China Cargo's future profitability will be
affected to a certain extent. Firstly, Air China Cargo is mainly engaged in airport-to-airport air transportation, serving mostly freight forwarders rather than manufacturers or cargo owners, with little bargaining power and remaining at the bottom of the value chain. Its profitability is easily squeezed amid fierce competition in the air cargo industry; secondly, cargo owners increasingly seek logistics companies that can provide comprehensive logistics solutions rather than single- functioned air transportation companies. Although Air China Cargo has been exploring new business models in recent years, business transformation is costly and slow to yield results. 

Although the profitability of Air China Cargo improved in 2017, the improvement was mainly due to the recovery of international transportation volume, cyclical rise of freight rates, and substantial exchange rate gain from the appreciation of Renminbi against US dollar. Given the complex international trade situation and the expected weakening of Renminbi, the profitability has not been fundamentally improved. Due to the extended period of poor performance, there is still a large amount of losses to be covered. Therefore, disposing of Air China Cargo is the concrete measure and reasonable choice for the Company to address the uncertainties of the air cargo market, allowing the Company to enhance the stability of its operations.

(ii)               Concentrating on the Company's air passenger transportation business

With the increase in the income of residents, the upgrade of consumption structure, and the increasingly close economic tie among regions, the air passenger transport business maintains stable growth while possessing huge market potential. Following the disposal of Air China Cargo, the Company will further concentrate its resources on the air passenger transport business to increase the competitiveness thereof while mitigating the impacts of intensified competition in the cargo transportation market and uncertainty of international trade situation on the Company's business performance, allowing the Company to concentrate on its air passenger transportation business.

Meanwhile, the Company's shareholder loan to Air China Cargo will be repaid by Air China Cargo prior to the completion. The amount will be used to further supplement the Company's working capital to enhance the robustness of the Company's operations.

III.    HONG KONG LISTING RULES IMPLICATIONS

As at the date of this announcement, Capital Holding is a wholly-owned subsidiary of CNAHC, the controlling shareholder of the Company, and is therefore a connected person of the Company as defined under the Hong Kong Listing Rules.

As one or more of the applicable Percentage Ratios of the Disposal is more than 5% but are all less than 25%, the Disposal constitutes a discloseable transaction and a connected transaction of the Company and is therefore subject to the reporting, announcement and independent shareholders' approval requirements under Chapter 14A of the Hong Kong Listing Rules and the requirements applicable to discloseable transaction under Chapter 14 of the Hong Kong Listing Rules. 

At the seventh meeting of the fifth session of the Board of the Company held on 30 August 2018, the Board approved the Disposal Agreement and the transactions contemplated thereunder. Mr. Cai Jianjiang, Mr. Song Zhiyong and Mr. Xue Yasong are considered to have a material interest in the Disposal Agreement and the transactions contemplated thereunder and therefore have abstained from voting in the relevant board resolution in respect of the Disposal Agreement and the transactions contemplated thereunder. Save as disclosed above, none of the Directors has a material interest in the Disposal Agreement and the transactions contemplated thereunder and hence no other Director is required to abstain from voting on the relevant board resolution.

The appraised value of Air China Cargo's total shareholders' equity determined by the Valuer was finally based on the valuation results using asset-based approach. However, as the Valuer is required under applicable PRC laws and regulations to conduct the valuation of Air China Cargo's total shareholders' equity using at least two valuation approaches, the Valuation Report therefore covers the valuation results based on the income approach. The Company has applied for, and the Stock Exchange has granted, a waiver from the profit forecast requirements under Rules 14.62, 14A.68(7), 14A.70(13) and paragraph 29(2) of Appendix 1B of the Hong Kong Listing Rules in respect of the Disposal.

IV.    SHANGHAI LISTING RULES IMPLICATIONS

Pursuant to the Shanghai Listing Rules, Capital Holding is a related party of the Company as it is controlled by the controlling shareholder of the Company. The Disposal Agreement shall be approved or ratified by the Independent Shareholders at the EGM.

V.      EXTRAORDINARY GENERAL MEETING

The Company will convene an extraordinary general meeting for the purpose of, among other things, obtaining Independent Shareholders' approval for the Disposal Agreement and the transactions contemplated thereunder. CNAHC and its associates will abstain from voting on the relevant resolution at the extraordinary general meeting.

The Independent Board Committee comprising all independent non-executive Directors has been set up to advise the Independent Shareholders in respect of the Disposal Agreement and the transactions contemplated thereunder. Octal Capital has been appointed as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in this regard.

A circular containing, among other things, (i) details of the Disposal Agreement and the transactions contemplated thereunder; (ii) a letter from Octal Capital to the Independent Board Committee and the Independent Shareholders containing its advice on the Disposal Agreement and the transactions contemplated thereunder; and (iii) the recommendation of the Independent Board Committee in respect of the Disposal Agreement and the transactions contemplated thereunder, will be despatched to Shareholders on or about 4 September 2018 in accordance with the Hong Kong Listing Rules.

DEFINITIONS

In this announcement, unless the context otherwise requires, the following terms shall have the following meanings:

"Air China Cargo"                           Air China Cargo Co., Ltd., a company incorporated under the laws of the PRC with limited liability

"Applicable Exchange Rate"             the midpoint price of RMB to the US dollar as published by the

People's Bank of China on 29 December 2017 (being the last Working Day prior to 31 December 2017), which is USD1 =

RMB6.5342

"A Share(s)"                                     the domestic share(s) in the share capital of the Company with a nominal value of RMB1.00 each, which are listed on the Shanghai Stock Exchange and traded in RMB

"associate(s)"                                    shall have the meaning ascribed to it by Hong Kong Listing Rules "Board"                                                         the board of Directors

"Capital Holding" or "Purchaser"

 

China National Aviation Capital Holding Co., Ltd. (中國航空資本控股有限責任公司), a limited liability company incorporated under laws of the PRC and a wholly-owned subsidiary of CNAHC

"Company"                                      Air China Limited, a company incorporated in the PRC, whose H shares are listed on the Stock Exchange as its primary listing venue and have been admitted to the Official List of the UK Listing Authority as its secondary listing venue, and whose A shares are listed on the Shanghai Stock Exchange

"Consideration"                                 RMB2,438,837,520, being the consideration for the Disposal "CNACG"                                          China National Aviation Corporation (Group) Limited

"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

"Disposal"                                      the sale of 51% equity interest in Air China Cargo by the Company to Capital Holding according to the terms and conditions of the Disposal Agreement

"Disposal Agreement"                     the share transfer agreement entered into between the Company and

Capital Holding on 30 August 2018 in relation to the Disposal

"Director(s)"                                     the director(s) of the Company

"Group"                                            the Company and its subsidiaries

"Hong Kong"                                   Hong Kong Special Administrative Region of the PRC

"Hong Kong Listing Rules"             the Rules Governing the Listing of Securities on the Stock Exchange

"H Share(s)"                                   the overseas listed foreign share(s) in the share capital of the Company with a nominal value of RMB1.00 each, which are listed on the Stock Exchange as its primary listing venue and have been admitted to the Official List of the UK Listing Authority as its secondary listing venue

"Independent Board Committee"

 

a board committee comprising Mr. Wang Xiaokang, Mr. Liu Deheng, Mr. Stanley Hui Hon-chung and Mr. Li Dajin, all being the independent non-executive Directors 

"Independent Financial Advisor" or "Octal Capital"

 

Octal Capital Limited, the independent financial adviser to the Independent Board Committee and the Independent Shareholders, and a corporation licensed to carry out Type 1 (dealing in securities) and Type 6 (advising on corporate finance) regulated activities under the SFO 

"Independent Shareholders"             the Shareholders other than CNAHC and CNACG

"Percentage Ratio"                           has the meaning ascribed to it by the Hong Kong Listing Rules "PRC"                                                                                 the People's Republic of China, excluding, for the purpose of this

circular only, Hong Kong, Macau and Taiwan

"RMB"                                             Renminbi, the lawful currency of the PRC

"Shanghai Listing Rules"                the Rules Governing the Listing of Stocks on the Shanghai Stock

Exchange

"Shareholder(s)"                                holder(s) of the Shares of the Company "Stock Exchange"                              The Stock Exchange of Hong Kong Limited "Valuation Benchmark Date"           31 December 2017

"Valuation Report"                           the asset valuation report on Air China Cargo issued by the Valuer

on 12 July 2018

"Valuer"                                            Beijing China Enterprise Appraisals Co., Ltd. (北京中企華資產評估有限責任公司), an independent valuer in the PRC

"Working Day"                                 any day other than dates when banks in the PRC are required or

authorised by laws of the PRC to be closed for business

By Order of the Board

Air China Limited
Zhou Feng     Tam Shuit Mui

Joint Company Secretaries

Beijing, the PRC, 30 August 2018

As at the date of this announcement, the directors of the Company are Mr. Cai Jianjiang, Mr. Song Zhiyong, Mr. Xue Yasong, Mr. John Robert Slosar, Mr. Wang Xiaokang*, Mr. Liu Deheng*, Mr. Stanley Hui Honchung* and Mr. Li Dajin*.

*    Independent non-executive director of the Company

 

END

 

 

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