Major Transaction
Air China Ld
09 June 2006
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 howsoever 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
(i) ACQUISITION OF CATHAY SHARES
(ii) ACQUISITION OF CATHAY SHARES BY CNAC LIMITED
(2) CONNECTED TRANSACTIONS
(i) ACQUISITION OF CATHAY SHARES
(ii) ISSUE OF AIR CHINA H SHARES
(3) CONNECTED TRANSACTIONS
(i) SALE OF DRAGONAIR SHARES BY CNAC LIMITED
(ii) ACQUISITION OF CATHAY SHARES BY CNAC LIMITED
Cathay Pacific Airways Limited
(incorporated in Hong Kong with limited liability)
(Stock Code: 293)
(1) CONNECTED TRANSACTIONS
(i) ACQUISITION OF DRAGONAIR SHARES
(ii) ALLOTMENT AND ISSUE OF CATHAY SHARES
(2) DISCLOSEABLE TRANSACTION
ACQUISITION OF DRAGONAIR SHARES
(3) DISCLOSEABLE TRANSACTION
ACQUISITION OF AIR CHINA H SHARES
(4) INCREASE IN AUTHORISED SHARE CAPITAL
(5) ALLOTMENT AND ISSUE OF CATHAY SHARES
PURSUANT TO LISTING RULE 13.36(1)(a)
China National Aviation Company Limited
(incorporated in Hong Kong with limited liability)
(Stock Code: 1110)
VERY SUBSTANTIAL DISPOSAL
SALE OF DRAGONAIR SHARES
VERY SUBSTANTIAL ACQUISITION
ACQUISITION OF CATHAY SHARES
CITIC Pacific Limited
(incorporated in Hong Kong with limited liability)
(Stock Code: 267)
(1) CONNECTED AND DISCLOSEABLE TRANSACTIONS
(i) SALE OF DRAGONAIR SHARES
(ii) ACQUISITION OF CATHAY SHARES
(2) DISCLOSEABLE TRANSACTION
SALE OF CATHAY SHARES
Swire Pacific Limited
(incorporated in Hong Kong with limited liability)
(Stock Codes: 19 and 87)
LISTING RULE 13.09 ANNOUNCEMENT
On 8 June 2006, Air China, Cathay, CNAC Limited, CITIC Pacific and SPAC
entered into a conditional agreement in relation to (i) the restructuring
of the parties' shareholdings in Cathay and Dragonair and (ii) the
acquisition by Cathay of additional shares in Air China. If the agreement
becomes unconditional, (1) Dragonair will become a wholly-owned
subsidiary of Cathay, (2) Air China will become a substantial shareholder
of Cathay and (3) Cathay will increase its shareholding in Air China.
Cathay has offered to acquire all the Dragonair Shares which it does not
already own for a total consideration of HK$8.22 billion (based on a
valuation of Dragonair of HK$10.00 billion or HK$20.00 per Dragonair
Share) to be satisfied by a combination of the issue of 548,045,724 new
Cathay Shares at an issue price of HK$13.50 per share and HK$0.82 billion
in cash.
Each of SPAC, CNAC Limited and CITIC Pacific has agreed to accept the
offer from Cathay to acquire their Dragonair Shares. To the extent that
any Dragonair Minority Shareholders do not accept the offer from Cathay
to acquire their Dragonair Shares, Cathay intends to exercise its powers
under section 168 of the Companies Ordinance (Cap.32 of the Laws of Hong
Kong) following completion of the Transaction to acquire compulsorily the
remaining Dragonair Shares from the relevant Dragonair Minority
Shareholders.
SPAC and CITIC Pacific have agreed to sell to Air China 40,128,292 and
359,170,636 Cathay Shares respectively. The consideration payable by Air
China for such Cathay Shares is HK$13.50 per share.
Cathay has agreed to subscribe in cash for 1,179,151,364 Air China H
Shares at an aggregate subscription price of HK$4.07 billion,
representing HK$3.45 per Air China H Share.
SPAC and CITIC Pacific have agreed to sell on or before Completion, such
number of Cathay Shares as will result in the percentage of Cathay Shares
held by them on Completion being 40% and 17.50% respectively and the
percentage of Cathay Shares in public hands being not less than 25%.
Under the Restructuring Agreement, SPAC and CITIC Pacific have agreed to
recommend to the Cathay Board that as soon as practicable following
Completion and in any event, no later than 60 days following Completion,
Cathay will pay a special interim dividend of HK$0.32 per Cathay Share.
SPAC, CNAC Limited, CITIC Pacific and Air China have entered into a
shareholders agreement for the purpose of regulating their relationship
with each other as shareholders of Cathay and certain aspects of the
affairs of, and their shareholdings in, Cathay, following completion of
the Transaction.
Under the Shareholders Agreement:
(i) the parties have agreed that the Cathay Board will, subject to
adjustment in certain circumstances, consist of four non-executive
directors nominated by SPAC, two non-executive directors nominated by
each of CITIC Pacific and Air China, five executive directors nominated
by SPAC and four independent non-executive directors;
(ii) the parties have agreed to support, including by exercise (to the
extent permitted by law and the rules of the Exchange) of their
respective voting rights as shareholders of Cathay, the continuation and
periodic renewal of the existing management arrangements for Cathay and
its subsidiaries, including the services agreement between John Swire &
Sons (H.K.) Limited and Cathay, and their extension to Dragonair and its
subsidiaries substantially on their current terms; and
(iii) to support the implementation of the Operating Agreement and by
exercise (to the extent permitted by law and the rules of the Exchange)
of their respective voting rights as shareholders of Cathay, its
continuation and any periodic renewal of it.
In addition, the parties have agreed to the following in relation to
their shareholdings in Cathay:
(i) SPAC has agreed that the beneficial interest of SPAC and its group in
the Cathay Share Capital will not exceed 44.90% (49.90% if (i) CITIC
Pacific and its group or (ii) Air China and its group increase their
respective combined aggregate beneficial interest in the Cathay Share
Capital to above 22.45%), except with the prior written consent of the
other parties;
(ii) Each of (i) CITIC Pacific and (ii) Air China and CNAC Limited have
agreed that the combined aggregate beneficial interest of respectively
CITIC Pacific and its group and Air China and its group in the Cathay
Share Capital will not exceed 29.99%, except with the prior written
consent of the other parties; and
(iii) CITIC Pacific, Air China and CNAC Limited have agreed that, except
with the prior written consent of SPAC, their combined beneficial
interest in the Cathay Share Capital (including those of their groups )
will not exceed 40% or the percentage beneficial interest of SPAC and its
group in the Cathay Share Capital (whichever is the lower).
(The undertakings by CITIC Pacific, Air China and CNAC Limited described
in paragraphs (ii) and (iii) above will cease to apply if SPAC (and/or
its group companies) disposes of Cathay Shares and as a result SPAC
(together with its group) is beneficially interested in less than 30% of
the Cathay Share Capital and Air China (together with its group) or CITIC
Pacific (together with its group) is beneficially interested (whether or
not as a result of such disposal by SPAC and/or its group companies) in
more Cathay Shares than SPAC (together with its group). The undertaking
by CITIC Pacific, Air China and CNAC Limited in paragraph (iii) above
will also cease to apply if SPAC (together with its group) is
beneficially interested in 44.50% or more of the Cathay Share Capital.
The undertakings by SPAC, CITIC Pacific, Air China and CNAC Limited
described above will cease to apply in favour of any shareholder which is
a party to the Shareholders Agreement whose beneficial interest in the
Cathay Share Capital (including that of its group) is less than 15%.)
The parties to the Shareholders Agreement have also agreed that so long
as a Shareholder is beneficially interested (together with its group)
(directly or indirectly) in 15% or more of the Cathay Share Capital, it
will not make a takeover offer for Cathay or accept a takeover offer from
a third party, unless that offer has been recommended by the Cathay
Board.
Air China and Cathay have today also jointly announced that they have
entered into the Operating Agreement.
Based on the assumptions and reasoning set out below under the heading
'Regulatory and Listing Rule Implications':
Air China
• the acquisition by Air China of Cathay Shares from
CITIC Pacific constitutes a connected transaction for Air China and is
subject to the approval of the independent shareholders of Air China;
• the issue of Air China H Shares to Cathay
constitutes a connected transaction for Air China and is subject to the
approval of the independent shareholders of Air China;
• the sale of Dragonair Shares by CNAC Limited (as a
subsidiary of Air China) to Cathay and the acquisition of Cathay Shares
by CNAC Limited (as a subsidiary of Air China) from Cathay each
constitutes a connected transaction for Air China and is subject to the
approval of the independent shareholders of Air China;
• the acquisition of Cathay Shares by CNAC Limited
(as a subsidiary of Air China) from Cathay, when aggregated with the
acquisition by Air China of Cathay Shares from CITIC Pacific and SPAC,
constitutes a major transaction for Air China and is subject to the
approval of the shareholders of Air China;
• the issue of additional Air China H Shares to
Cathay is subject to approval by a special resolution of shareholders in
general meeting of Air China and approvals by special resolutions of
shareholders at separate class meetings of Air China in accordance with
Air China's articles of association and Rule 19A.38 of the Listing Rules;
Cathay
• the acquisition of Dragonair Shares by Cathay from
SPAC and CITIC Pacific constitutes a connected transaction and is subject
to the approval of the independent shareholders of Cathay;
• the allotment and issue of new Cathay Shares by
Cathay to SPAC and CITIC Pacific constitutes a connected transaction for
Cathay and is subject to the approval of the independent shareholders of
Cathay;
• the acquisition of Dragonair Shares by Cathay from
each of SPAC, CITIC Pacific, CNAC Limited and the Dragonair Minority
Shareholders, when aggregated, constitutes a discloseable transaction for
Cathay;
• the acquisition by Cathay of additional Air China H
Shares constitutes a discloseable transaction for Cathay;
• the proposed increase of the authorised share
capital of Cathay from 3,900,000,000 Cathay Shares to 5,000,000,000
Cathay Shares to facilitate the Transaction is subject to the approval of
the shareholders of Cathay;
• the allotment and issue by Cathay of new Cathay
Shares to SPAC and CITIC Pacific is subject to the approval of the
shareholders of Cathay pursuant to Rule 13.36(1)(a) of the Listing Rules;
CNAC Limited
• the sale by CNAC Limited of Dragonair Shares to
Cathay in consideration of Cathay issuing new Cathay Shares and paying
HK$0.43 billion in cash to CNAC Limited constitutes a very substantial
disposal and a very substantial acquisition for CNAC Limited and is
therefore subject to the approval of the shareholders of CNAC Limited;
CITIC Pacific
• the sale by CITIC Pacific of Dragonair Shares to
Cathay constitutes a connected transaction for CITIC Pacific and is
subject to the approval of the independent shareholders of CITIC Pacific;
• the sale by CITIC Pacific of Dragonair Shares to
Cathay constitutes a discloseable transaction for CITIC Pacific;
• the acquisition of new Cathay Shares by CITIC
Pacific as consideration for the Dragonair Shares constitutes a connected
transaction for CITIC Pacific and is subject to the approval of the
independent shareholders of CITIC Pacific;
• the acquisition by CITIC Pacific of new Cathay
Shares as consideration for the Dragonair Shares constitutes a
discloseable transaction for CITIC Pacific; and
• the sale by CITIC Pacific of Cathay Shares to Air
China constitutes a discloseable transaction for CITIC Pacific.
SPAC
• This joint announcement is made, in the case of
SPAC, under Rule 13.09 of the Listing Rules.
A circular giving further details of the Transaction, the views of the
independent non-executive directors of Air China and independent
financial adviser to Air China, together with a notice of the Air China
EGM will be dispatched to shareholders of Air China as soon as
practicable.
Details of the Transaction, to the extent they constitute connected
transactions for Air China, will also be included in Air China's next
annual report and accounts in accordance with Rule 14A.45 of the Listing
Rules.
A circular giving further details of the Transaction, the views of the
independent non-executive directors of Cathay and independent financial
adviser to Cathay, together with notice of the Cathay EGM will be
dispatched to shareholders of Cathay as soon as practicable.
Details of the Transaction, to the extent they constitute connected
transactions for Cathay, will also be included in Cathay's next annual
report and accounts in accordance with Rule 14A.45 of the Listing Rules.
A circular giving further details of the Transaction, the views of the
independent non-executive directors of CNAC Limited and independent
financial adviser to CNAC Limited, together with a notice of the CNAC
Limited EGM will be dispatched to shareholders of CNAC Limited as soon as
practicable.
A circular giving further details of the Transaction, the views of the
independent non-executive directors of CITIC Pacific and independent
financial adviser to CITIC Pacific, together with a notice of the CITIC
Pacific EGM will be dispatched to shareholders of CITIC Pacific as soon
as practicable.
Details of the Transaction, to the extent they constitute connected
transactions for CITIC Pacific, will also be included in CITIC Pacific's
next annual report and accounts in accordance with Rule 14A.45 of the
Listing Rules.
Conditional Undertaking and Request for Privatization of CNAC Limited
On Ling Investments Limited, which beneficially owns approximately 9.75%
of the issued share capital of CNAC Limited, has given a conditional
irrevocable undertaking to Air China and CNAC Limited to vote in favour
of the shareholders' resolutions to be proposed at CNAC Limited's
shareholders' meeting to approve the sale by CNAC Limited of Dragonair
Shares to Cathay and the acquisition of Cathay Shares by CNAC Limited as
described in this announcement. The conditions precedent to On Ling's
undertaking are:
(a) the publication of an announcement by or on behalf of Air China of a
privatization offer in cash for all the issued shares of CNAC Limited,
other than those already owned by Air China and parties acting in concert
with it, on terms no less favourable than HK$2.80 per CNAC Limited Share;
and
(b) the independent financial adviser to CNAC Limited's independent board
of directors committee is of the opinion that the terms of the sale of
the Dragonair Shares and the privatization referred to in paragraph (a)
above from a financial perspective are fair and reasonable.
Following receipt of the conditional undertaking from On Ling Investments
Limited, CNAC Limited Directors have requested Air China to privatize
CNAC Limited by way of a scheme of arrangement, on the basis that the
offer price will be HK$2.80 per CNAC Limited share. Air China is
currently considering the request by CNAC Limited Directors and
is seeking the appropriate PRC regulatory approvals and financing to
proceed with the privatization offer. Air China is currently also in the
process of formulating the proposals for the privatization offer and will
issue an announcement if and as soon as the proposals are finalized. As
certain terms of the proposals are subject to various external factors
that are outside its control, Air China is not in a position, as at the
date of this announcement, to provide an estimate of the timing for any
announcement of a privatization offer.
As such, there is no certainty as to whether or not Air China will make a
privatization offer for CNAC Limited. Accordingly, shareholders and
potential investors in CNAC Limited should not assume that a
privatization offer will be made and should instead exercise caution in
dealing in CNAC Limited's shares.
The Executive takes the view that, if a privatization offer is made by
Air China pursuant to the request of CNAC Limited Directors, Air China
will have to make the offer in cash at HK$2.80 per CNAC Limited Share.
Resumption of Trading
At the request of each of Air China, Cathay, CNAC Limited, CITIC Pacific
and SPAC, trading in shares in each of them on the Exchange was suspended
with effect from 9:30 a.m. (in the case of Cathay, CITIC Pacific and
SPAC) and 9:31 a.m. (in the case of Air China and CNAC Limited) on 5 June
2006 pending the issue of this announcement. Application has been made
by each of Air China, Cathay, CNAC Limited, CITIC Pacific and SPAC to the
Exchange for the resumption of trading in each of their shares with
effect from 9:30 a.m. on 9 June 2006.
DESCRIPTION OF THE TRANSACTION
On 8 June 2006, Air China, Cathay, CNAC Limited, CITIC Pacific and SPAC
entered into a conditional agreement in relation to the restructuring of
the parties' shareholdings in Cathay and Dragonair. If the agreement
becomes unconditional, (1) Dragonair will become a wholly-owned
subsidiary of Cathay, (2) Air China will become a substantial shareholder
of Cathay and (3) Cathay will increase its shareholding in Air China.
The principal shareholdings in Cathay and Dragonair as at the date of
this announcement are as follows:
Cathay
Number of Shares % of Shares
SPAC 1,566,233,246 46.30%
CITIC Pacific 859,353,462 25.40%
Public 957,197,640 28.30%
-------------- -----------
Total 3,382,784,348 100.00
-------------- -----------
Dragonair
Number of Shares % of Shares
SPAC 38,551,808 7.71%
Cathay 88,965,707 17.79%
CITIC Pacific 142,482,484 28.50%
CNAC Limited 216,447,251 43.29%
Dragonair Minority 13,552,750 2.71%
Shareholders
-------------- -----------
Total 500,000,000 100.00
-------------- -----------
Purchase of Dragonair Shares and Issue of new Cathay Shares
Cathay has offered to acquire all the Dragonair Shares which it does
not already own for a total consideration of HK$8.22 billion (based on
a valuation of Dragonair of HK$10.00 billion or HK$20.00 per Dragonair
Share) to be satisfied by a combination of the issue of 548,045,724 new
Cathay Shares at an issue price of HK$13.50 per share and HK$0.82
billion in cash.
Each of SPAC, CITIC Pacific and CNAC Limited has agreed to accept the
offer from Cathay to acquire their Dragonair Shares. To the extent that
any Dragonair Minority Shareholders do not accept the offer from Cathay
to acquire their Dragonair Shares, Cathay intends to exercise its
powers under section 168 of the Companies Ordinance (Cap.32 of the Laws
of Hong Kong) following completion of the Transaction to acquire
compulsorily the remaining Dragonair Shares from the relevant Dragonair
Minority Shareholders.
The valuation of Dragonair was determined following arm's length
negotiation between the parties, based on the underlying value of
Dragonair, as reflected in the market price of CNAC Limited, and having
regard to the trading multiples of comparable airlines, in addition to
considering the benefits to Cathay of full ownership of Dragonair and
potential synergies arising from a combination of the businesses. The
issue price of the new Cathay Shares was determined following arm's
length negotiation between the parties, in particular with reference to
the current and recent average trading price of Cathay Shares.
Purchase of Cathay Shares
SPAC and CITIC Pacific have agreed to sell to Air China 40,128,292 and
359,170,636 Cathay Shares respectively. The consideration payable by
Air China for such Cathay Shares is HK$13.50 per share and was
determined by the parties after arm's length negotiation, in particular
with reference to the current and recent average trading price of
Cathay Shares.
Placing
SPAC and CITIC Pacific have agreed to sell on or before Completion,
such number of Cathay Shares as will result in the percentage of Cathay
Shares held by them on Completion being 40% and 17.50% respectively and
the percentage of Cathay Shares in public hands being not less than 25%.
Acquisition of Additional Air China H Shares
In December 2004, Cathay acquired a 10% interest in the share capital
of Air China by subscribing for Air China H Shares when the Air China H
Shares were listed on the Exchange. Cathay has agreed to subscribe in
cash for an additional 1,179,151,364 Air China H Shares at an aggregate
subscription price of HK$4.07 billion, representing HK$3.45 per Air
China H Share. Following completion of this subscription, Cathay will
have a 20.00% interest in the enlarged issued share capital of Air
China.
Following Completion (on the basis that Cathay has acquired all the
Dragonair Shares held by the Dragonair Minority Shareholders), Cathay
will own all the shares in Dragonair and the shareholdings in Cathay
will be as follows:
Cathay
Number of Shares % of Shares
SPAC 1,572,332,028 40.00%
CITIC Pacific 687,895,263 17.50%
CNAC Limited 288,596,335 7.34%
Air China 399,298,928 10.16%
Public 982,707,518 25.00%
-------------- -----------
Total 3,930,830,072 100.00
-------------- -----------
Special Dividend
Under the Restructuring Agreement, SPAC and CITIC Pacific have agreed
to recommend to the Cathay Board that as soon as practicable following
Completion and in any event, no later than 60 days following
Completion, Cathay will pay a special interim dividend of HK$0.32 per
Cathay Share.
The shareholdings in Dragonair, Cathay and Air China (1) immediately
prior to Completion and (2) immediately following Completion are
expected to be as follows:
Shareholding structures of Cathay, Dragonair and Air China
immediately prior to Completion
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Shareholding structures of Cathay, Dragonair and
Air China immediately following Completion
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view the above diagram:
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SHAREHOLDERS AGREEMENT
SPAC, CNAC Limited, CITIC Pacific and Air China have entered into a shareholders agreement for
the purpose of regulating their relationship with each other as shareholders of Cathay and
certain aspects of the affairs of, and their shareholdings in, Cathay, following completion of
the Transaction.
Under the Shareholders Agreement, the parties have agreed:
(i) that the Cathay Board will, subject to adjustment in certain circumstances, consist of four
non-executive directors nominated by SPAC, two non-executive directors nominated by each of
CITIC Pacific and Air China, five executive directors nominated by SPAC and four independent
non-executive directors;
(ii) to support, including by exercise (to the extent permitted by law and the rules of the
Exchange) of their respective voting rights as shareholders of Cathay, the continuation and
periodic renewal of the existing management arrangements for Cathay and its subsidiaries,
including the services agreement between John Swire & Sons (H.K.) Limited and Cathay, and their
extension to Dragonair and its subsidiaries substantially on their current terms; and
(iii) to support the implementation of the Operating Agreement and by exercise (to the extent
permitted by law and the rules of the Exchange) of their respective voting rights as
shareholders of Cathay, its continuation and any periodic renewal of it.
In addition, the parties have agreed to the following in relation to their shareholdings in
Cathay:
(i) SPAC has agreed that the beneficial interest of SPAC and its group in the Cathay Share
Capital will not exceed 44.90% (49.90% if (i) CITIC Pacific and its group or (ii) Air China and
its group increase their respective combined aggregate beneficial interest in the Cathay Share
Capital to above 22.45%), except with the prior written consent of the other parties.
(ii) each of (i) CITIC Pacific and (ii) Air China and CNAC Limited have agreed that the combined
aggregate beneficial interest of respectively CITIC Pacific and its group and Air China and its
group in the Cathay Share Capital will not exceed 29.99%, except with the prior written consent
of the other parties; and
(iii) CITIC Pacific, Air China and CNAC Limited have agreed that, except with the prior written
consent of SPAC, their combined beneficial interest in the Cathay Share Capital (including those
of their groups ) will not exceed 40% or the percentage beneficial interest of SPAC and its
group in the Cathay Share Capital (whichever is the lower).
(The undertakings by CITIC Pacific, Air China and CNAC Limited described in paragraphs (ii) and
(iii) above will cease to apply if SPAC (and/or its group companies) disposes of Cathay Shares
and as a result SPAC (together with its group) is beneficially interested in less than 30% of
the Cathay Share Capital and Air China (together with its group) or CITIC Pacific (together with
its group) is beneficially interested (whether or not as a result of such disposal by SPAC and/
or its group companies)) in more Cathay Shares than SPAC (together with its group). The
undertaking by CITIC Pacific, Air China and CNAC Limited described in paragraph (iii) above will
also cease to apply if SPAC (together with its group) is beneficially interested in 44.50% or
more of the Cathay Share Capital. The undertakings by SPAC, CITIC Pacific, Air China and CNAC
Limited described above will cease to apply in favour of any shareholder which is a party to the
Shareholders Agreement whose beneficial interest in the Cathay Share Capital (including that of
its group) is less than 15%.)
The parties to the Shareholders Agreement have also agreed that so long as a Shareholder is
beneficially interested (together with its group) (directly or indirectly) in 15% or more of the
Cathay Share Capital, it will not make a takeover offer for Cathay or accept a takeover offer
from a third party, unless that offer has been recommended by the Cathay Board.
Operating Agreement
Air China and Cathay have today also jointly announced that they have entered into the Operating
Agreement.
CONDITIONS
Completion of the Transaction, (and the coming into effect of the Shareholders Agreement), is
conditional upon satisfaction of the following conditions:-
(A) entering into the Shareholders Agreement and implementation of the Transaction
not giving rise to an obligation on any of SPAC, CITIC Pacific, Air China or CNAC Limited to
make a mandatory offer to acquire all the Cathay Shares under the Takeovers Code; in this
connection the Executive has confirmed that, as SPAC and CITIC Pacific are concert parties in
relation to the voting rights of Cathay and together hold more than 50% of the Cathay Shares, no
such obligation will arise;
(B) Air China having obtained all necessary approvals of relevant regulatory
bodies in the PRC and any other regulatory approvals;
(C) the Listing Committee of the Exchange having granted listing of and permission
to deal in :
(i) the new Cathay Shares to be issued to SPAC, CITIC Pacific, CNAC Limited and
the Dragonair Minority Shareholders described above; and
(ii) the new Air China H Shares to be issued to Cathay described above;
(D) the independent shareholders of CITIC Pacific in general meeting having passed
resolutions approving the sale by CITIC Pacific of its Dragonair Shares to Cathay and the
acquisition of the new Cathay Shares to be issued by Cathay to CITIC Pacific as consideration
for the Dragonair Shares sold by CITIC Pacific to Cathay, in each case as a connected
transaction;
(E) the independent shareholders of CNAC Limited in general meeting having passed
resolutions to approve the sale of CNAC Limited's Dragonair Shares to Cathay as a very
substantial disposal and the acquisition of Cathay Shares by CNAC Limited as a very substantial
acquisition;
(F) the independent shareholders of Cathay in general meeting having passed
resolution(s) to approve the acquisition of Dragonair Shares by Cathay from SPAC and CITIC
Pacific and the allotment and issue of new Cathay Shares by Cathay to SPAC and CITIC Pacific, in
each case as a connected transaction and the shareholders of Cathay in general meeting having
passed resolution(s) to approve the increase of the authorized share capital of Cathay and the
allotment and issue of new Cathay Shares to SPAC and CITIC Pacific pursuant to Rule 13.36(1)(a)
of the Listing Rules;
(G) the independent shareholders of Air China in general meeting having passed
resolutions approving the sale of Dragonair Shares by CNAC Limited to Cathay, the acquisition of
Cathay Shares by CNAC Limited, the acquisition by Air China of Cathay Shares from CITIC Pacific
and the issue of Air China H Shares to Cathay, in each case as a connected transaction, the
shareholders of Air China in general meeting having passed a resolution approving the
acquisition of Cathay Shares by CNAC Limited, the acquisition by Air China of Cathay Shares from
CITIC Pacific and SPAC as a major transaction (when aggregated) and the shareholders of Air
China in general meeting having passed a special resolution and the shareholders of Air China in
separate class meetings having passed special resolutions, in each case approving the issue of
additional Air China H Shares to Cathay in accordance with Air China's articles of association
and applicable Listing Rules;
(H) Cathay being satisfied that it is entitled under Section 168 of the Companies
Ordinance to acquire compulsorily all the Dragonair Shares held by each person who does not
accept its offer for all the Dragonair Shares;
(I) Cathay being satisfied as to its due diligence investigations of Dragonair
and Air China; and
(J) Air China being satisfied as to its due diligence investigations of Cathay.
Completion of the Transaction is expected to take place on the fifth Business Day following
satisfaction of these conditions.
REASONS FOR THE TRANSACTION
In recent years the Chinese aviation industry has experienced rapid growth and development: the
creation of three Chinese airline groups, the continuing opening up of the market to
international airlines and the increasing internationalisation of the Chinese airlines' route
networks. In the context of these market developments, the shareholding structure of Dragonair
has proved to be not efficient with the result that Dragonair is unable to take full advantage
of potential economies of scale and the management of its business is not optimised. The
rationalisation of the shareholding structure of Dragonair will benefit all the companies that
are current shareholders of Dragonair and Dragonair itself. In addition, with further
investments in each other, Air China and Cathay will continue to work together in exploring ways
to improve their service offering, network and connectivity and developing the Chinese aviation
industry.
The international network of Cathay and the principally Hong Kong - Mainland China network of
Dragonair are highly complementary and together will improve Cathay's network reach,
connectivity to China and between China and the rest of the world. In addition the cooperation
with Air China will further the development of Beijing Capital International Airport and Hong
Kong International Airport as gateways to and hubs for Mainland China and thus the Transaction
will be to the benefit of the Hong Kong and Greater China aviation industry.
Air China
The Transaction and related Operating Agreement are the culmination of a process of increasing
cooperation with Cathay that began with the joint announcement of the memorandum of
understanding between the parties in October 2004.
Air China believes that intensified co-operation between Air China, the leading mainland airline
based in Beijing, with Cathay, the leading airline based in Hong Kong, will bring significant
benefits to Air China and the entire Chinese aviation industry. In addition, the goal of
developing Beijing Capital International Airport and Hong Kong International Airport as gateways
to and hubs for mainland China will be furthered by this Transaction and this in turn will
increase the ability of Air China to compete on the international stage.
Through the cross-shareholdings that will result from the implementation of the Transaction and
the Operating Agreement, Air China and Cathay have the potential of realising substantial
revenue and cost synergies through economies of scale and optimisation of resources. Together,
Air China and Cathay (with Dragonair 100% owned) will be able to deliver more destinations,
better flight connectivity and improved services as a whole. Through reciprocal sales
representation where Air China will be exclusively responsible for Cathay's passenger sales in
Mainland China while Cathay will be exclusively responsible for Air China's passenger sales in
Hong Kong, Macau and Taiwan, code-shared and joint venture routes that will operate under
revenue and cost pooling arrangements as well as other areas of business cooperation, the
Operating Agreement is expected to allow Air China to benefit from improved load factors and
better route management. Furthermore, through closer operational cooperation and cross-placement
of management, Air China will benefit from greater exposure to international best practice in
areas such as network design and scheduling, product design, yield management, operational
management and risk management and service delivery.
Upon completion of the Transaction, Air China, together with CNAC Limited, will hold 17.50%
shareholding in Cathay which, coupled with Air China's rights under the Operating Agreement and
Shareholders' Agreement, allow Air China to account for its shareholding in Cathay using the
equity accounting method and will therefore benefit on a consolidated basis from the strong
profitability of Cathay. From a cash flow perspective, Air China will also benefit from the
receipt of dividend payments from Cathay.
As part of the Transaction, Cathay will subscribe for 1,179,151,364 new Air China H shares,
becoming a 20.00% shareholder of the enlarged issued share capital of Air China, at a premium to
the prevailing market price of Air China H shares. This will result in cash proceeds of HK$4.07
billion to Air China, which will help finance the planned expansion of Air China's fleet and
other important business development initiatives.
Through its 68.36% shareholding in CNAC Limited, Air China believes that it is also realising
full value for CNAC Limited's 43.29% shareholding in Dragonair. Furthermore, Air China will be
able to share in the future benefits that will arise from a combination of Cathay and Dragonair
through its ongoing shareholding in Cathay.
Cathay
Cathay believes that combining the international network of Cathay with the network of Dragonair
will improve Cathay's network reach, connectivity to China and between China and the rest of the
world. Further, the additional operational co-operation with Air China will promote Hong Kong
and Beijing Airports as major Asian/Chinese hubs improving traffic flows for Cathay, Dragonair,
and Air China and connectivity and services for passenger and cargo customers. Full control of
Dragonair by Cathay allows the realisation of substantial synergies. Cathay expects ownership of
Dragonair and increased co-operation between Cathay (with Dragonair 100% owned) and Air China to
increase connectivity, convenience and marketing and thus load factors. In addition Cathay
expects cost savings within Cathay and Dragonair from the increased scale of operations,
improved aircraft utilisation and from adopting best practices. The value of Dragonair as a
standalone entity, the benefits of network integration and the potential synergies available to
Cathay support the valuation of HK$10 billion that the Transaction implies for 100% of the
equity of Dragonair.
Increasing its shareholding in Air China to 20% ensures that Cathay will share in the synergies
and benefits of co-operation that accrue to Air China. Further, at 20%, Cathay will equity
account for its share in Air China and will therefore include 20% of the profits of Air China in
its results. The acquisition price of HK$3.45 per Air China share represents a 15.8% premium to
the Air China's IPO price and a 11.3% premium to the closing share price on the Last Trading
Date. In light of the additional influence on Air China and with it the ability to equity
account, the Cathay Directors believe that the price is an attractive level at which to increase
its stake in Air China.
CNAC Limited
The competitive position of Dragonair has changed significantly in the past few years, facing
competition from larger, full cost carriers into China/Hong Kong, other hubs as well as Asian
low cost carriers and a number of new airlines that have recently been established in Hong Kong,
China and across Asia.
In light of this increasingly competitive operational landscape, CNAC Limited believes that
Dragonair would benefit from being under the direct management control of a single airline
group. The current shareholding structure of Dragonair has proved to be not efficient with the
result that Dragonair is unable to take full advantage of potential economies of scale and the
management of its business is not optimised. CNAC Limited believes that direct control of
Dragonair by Cathay would allow Dragonair to secure its future growth and profitability. The
combination of the two businesses and the alignment of shareholder and management interests
within the wider Cathay Group will create the opportunity to realize substantial synergies and
provide the flexibility to react to the challenges in the Chinese and Asian airline industry.
The terms of the Transaction value 100% of the equity of Dragonair at HK$10 billion. This
valuation represent a price-to-earnings ratio of 33.3 times Dragonair's reported earnings of
HK$300.4 million for the year ended 31st December 2005. CNAC Limited believes that this
valuation reflects not only the full intrinsic value of Dragonair but also a fair sharing of the
synergies that Cathay anticipates to accrue from the combination of the two airlines.
As a consequence of the Transaction, CNAC Limited will hold a 7.34% shareholding in Cathay,
thereby exchanging an illiquid shareholding in an unlisted company (Dragonair) for a
shareholding in a listed company (Cathay) whose shares enjoy a high level of trading liquidity
on the Exchange. Furthermore, the Transaction will allow CNAC Limited to realise a gain of
approximately HK$2.96 billion to its consolidated profit and loss account, and, together with
the payment of the special dividend by Cathay, CNAC Limited will receive HK$525.2 million of
cash proceeds. Going forward, CNAC Limited will benefit from its proportional share of dividend
income from Cathay, which, as a result of its cooperation with Air China and its consolidation
with Dragonair, will be able to deliver even better value for its shareholders in the future.
CITIC Pacific
The transaction provides CITIC Pacific an attractive exit price for its shares in Dragonair.
CITIC Pacific will sell shares in Cathay at above the prevailing market price at the date of
this announcement and will retain a 17.50% stake in Cathay to share in the benefits of the
combination of Cathay and Dragonair and operational cooperation with Air China as outlined
above. CITIC Pacific intends to hold the shares of Cathay as a long term investment. The CITIC
Pacific Directors estimate that, with reference to the projected carrying value of the
investment in Cathay and Dragonair but subject to the exact completion date, an estimated profit
of approximately HK$2 billion will arise from the transaction.
The transaction allows CITIC Pacific to realise cash of approximately HK$5 billion (excluding
the special dividend intended to be distributed following Completion), to be used for pursuing
development of the core businesses which CITIC Pacific actively manages to leverage off its
expertise.
SPAC
Currently SPAC has a minority shareholding in Dragonair and is the largest shareholder in
Cathay. Following the Transaction, SPAC will remain the single largest shareholder in the
combined Cathay-Dragonair group. As the largest single shareholder of Cathay, SPAC expects to
enjoy its proportional share of the operational and management benefits that Cathay anticipates,
as outlined above. Further, SPAC will enjoy a net cash inflow from the Transaction of
approximately HK$1.2 billion.
The Air China Directors (other than the independent non-executive directors whose views will be
set out in the circular to be dispatched to the shareholders of Air China together with the
advice of the independent financial adviser) have considered the Transaction and are of the
opinion that the Transaction and its terms are fair and reasonable and are in the interests of
the shareholders of Air China as a whole.
The Cathay Directors (other than the independent non-executive directors whose views will be set
out in the circular to be dispatched to the shareholders of Cathay together with the advice of
the independent financial adviser) have considered the Transaction and are of the opinion that
the Transaction and its terms are fair and reasonable and are in the interests of the
shareholders of Cathay as a whole.
The CNAC Limited Directors (other than the independent non-executive directors whose views will
be set out in the circular to be dispatched to the shareholders of CNAC Limited together with
the advice of the independent financial adviser) have considered the Transaction and are of the
opinion that the Transaction and its terms are fair and reasonable and are in the interests of
the shareholders of CNAC Limited as a whole.
The CITIC Pacific Directors (other than the independent non-executive directors whose views will
be set out in the circular to be dispatched to the shareholders of CITIC Pacific together with
the advice of the independent financial adviser) have considered the Transaction and are of the
opinion that the Transaction and its terms are fair and reasonable and are in the interests of
the shareholders of CITIC Pacific as a whole.
OTHER RELEVANT INFORMATION IN RELATION TO THE TRANSACTION
Acquisition of Dragonair Shares by Cathay
The number of Dragonair Shares to be acquired by Cathay from each of SPAC, CITIC Pacific, CNAC
Limited and the Dragonair Minority Shareholders, the number of new Cathay Shares to be issued to
them as consideration and the amount of cash consideration to be paid to them are as follows:
Number of Total Number of Number of new Number of new Cash
Dragonair Consideration new Cathay Cathay Shares Cathay Shares Consideration
Shares to (HK$) Shares to be to be issued to be issued (HK$)
be acquired issued (at as a as a
HK$13.50 per percentage of percentage of
share) issued share enlarged
capital of issued share
Cathay capital of
immediately Cathay
prior to following
Completion Completion
SPAC 38,551,808 771,036,160 51,402,411 1.52% 1.31% 77,103,611.50
CITIC 142,482,484 2,849,649,680 189,976,645 5.62% 4.83% 284,964,972.50
Pacific
CNAC Limited 216,447,251 4,328,945,020 288,596,335 8.53% 7.34% 432,894,497.50
Dragonair 13,552,750 271,055,000 18,070,333 0.53% 0.46% 27,105,504.50
Minority
Shareholders
___________ ____________ ____________ _____________ _____________ _____________
Total 411,034,293 8,220,685,860 548,045,724 16.20% 13.94% 822,068,586
Acquisition of Cathay Shares by Air China
The number of Cathay Shares to be acquired by Air China from SPAC and CITIC
Pacific Shareholders as described above under 'Description of the
Transaction', is as follows:
Number of Cathay Number of Number of Consideration
Shares to be Cathay Shares Cathay Shares (HK$)
acquired by Air to be acquired to be acquired
China as a percentage as a percentage
of issued share of enlarged
capital of issued share
Cathay capital of
immediately Cathay
prior to following
Completion Completion
SPAC 40,128,292 1.19% 1.02% 541,731,942
CITIC 359,170,636 10.62% 9.14% 4,848,803,586
Pacific
________________ _______________ _______________ ________________
Total 399,298,928 11.80% 10.16% 5,390,535,528
New Cathay Shares
The issue price of the new Cathay Shares to be issued under the
Transaction of HK$13.50 per share was determined by the parties after
arm's length negotiation, in particular with reference to the current
and recent average trading price of Cathay Shares. Such issue price
represents a 4.2% premium to the closing price of the Cathay Shares of
HK$12.95 on the Last Trading Date prior to suspension of trading of
Cathay Shares on 5 June 2006.
The new Cathay Shares will rank pari passu in all respects with all
other Cathay Shares in issue on the date of allotment and issue of such
shares.
The total number of new Cathay Shares to be issued as consideration for
Dragonair Shares under the Transaction is 548,045,724, which represents
approximately 16.20% of the existing Cathay Share Capital and
approximately 13.94% of the Cathay Share Capital as enlarged by the
issue of those shares (on the basis that new Cathay Shares will be
issued to all Dragonair Minority Shareholders whether because they
accept Cathay's offer for their Dragonair Shares or through compulsory
acquisition).
New Air China H Shares
The issue price of the new Air China H Shares to be issued to Cathay
under the Transaction of HK$3.45 per share was determined by the
parties after arm's length negotiations, representing a premium of
approximately 11.3% over the closing price of approximately HK$3.10 per
Air China H Share on the Last Trading Date.
PUBLIC FLOAT REQUIREMENT
Pursuant to the Listing Rules, at least 24.20% of Air China's issued
share capital must at all times be held by the public. Following
Completion, and in particular following Cathay's subscription of
1,179,151,364 Air China H Shares to be issued by Air China, the
percentage of Air China shares held by the public will decrease to
approximately 21.51% of the enlarged issued share capital of Air China.
Air China has applied for a waiver from the Exchange to permit a public
float of 21.51%, subject to the minimum of 24.20% public float being
restored within 12 months following Completion. The Exchange may or may
not grant the waiver. In the meantime, Air China would take steps to
increase its public float. Such increase may take the form of an issue
of up to 2.7 billion A Shares by Air China which issuance was approved
by Air China shareholders on 28 March 2006 and/or through the issuance
of Air China H Shares. For further details of the A Share issuance by
Air China, please refer to the announcements by Air China dated
9 February 2006 and 13 February 2006. Further announcements about the
development of the public float waiver application will be made in due
course.
As at the date of this announcement, the proposed A Share offering has
yet to be approved by regulators and is also dependent on market
conditions and accordingly the timing of the A Share offering is
outside Air China's control. Air China Directors are of the view that
both fund raising methods through issuance of Air China H Shares and
the A Share offering could be beneficial to Air China and therefore it
is in the best interest of Air China to keep open the options of
issuance of Air China H Shares and the A Share offering as possible
methods to restore the public float.
FINANCIAL INFORMATION ON DRAGONAIR, CATHAY AND AIR CHINA
Based on the audited consolidated financial statements of Dragonair for
the year ended 31 December 2005, Dragonair had a net book asset value
of HK$3,155 million. Based on the audited consolidated financial
statements of Dragonair for the years ended 31 December 2004 and 2005,
the net profits of Dragonair before taxation and extraordinary items
for those years were HK$765 million and HK$316 million respectively,
and the net profits of Dragonair after taxation and extraordinary items
for those years were HK$637 million and HK$300 million respectively.
Based on the audited consolidated financial statements of Cathay for
the year ended 31 December 2005, Cathay had a net book asset value
(excluding minority interests) of HK$34,968 million . Based on the
audited consolidated financial statements of Cathay for the years ended
31 December 2004 and 2005, the net profits of Cathay before taxation
and extraordinary items for those years were HK$4,962 million and
HK$3,968 million respectively, and the net profits of Cathay after
taxation and extraordinary items for those years were HK$4,417 million
and HK$3,298 million respectively.
Based on the audited consolidated financial statements of Air China for
the year ended 31 December 2005, Air China had a net book asset value
(excluding minority interests) of RMB20,092 million . Based on the
audited consolidated financial statements of Air China for the years
ended 31 December 2004 and 2005, the net profits of Air China before
taxation and extraordinary items for those years were RMB3,560 million
and RMB3,374 million respectively, and the net profits of Air China
after taxation and extraordinary items for those years were RMB2,386
million and RMB2,406 million respectively.
INFORMATION ON THE PRINCIPAL BUSINESSES OF CATHAY, DRAGONAIR, SPAC,
CITIC PACIFIC, CNAC LIMITED AND AIR CHINA
The principal business activities of Cathay and its subsidiary and
associated companies are the operation of scheduled passenger and cargo
airline services.
The principal business activities of Dragonair is the operation of
scheduled passenger airline services, principally to and from Hong
Kong.
The principal business activity of SPAC is investment holding.
The principal business activity of CITIC Pacific is investment holding.
The principal business activity of CNAC Limited is investment holding,
including of shares in Dragonair as well as the other businesses
mentioned below. Following the disposal of Dragonair, the remaining
core businesses of CNAC Limited will include air transportation
services (Air Macau), airline catering services (Beijing Air Catering
Co. Ltd., Southwest Air Catering Co. Ltd., and LSG Lufthansa Service
Hong Kong Ltd.), airport ground handling services (Jardine Airport
Service Ltd. and Menzies Macau Airport Services Ltd.) and logistics
services (Tradeport Hong Kong Ltd.).
The principal business activity of Air China is the operation of
passenger and air cargo services and airline-related services.
REGULATORY AND LISTING RULE IMPLICATIONS
(A) Air China
Shareholder Approval
As at the date of this announcement, CITIC Pacific is a substantial
shareholder of a subsidiary of Air China and is therefore a connected
person of Air China. The acquisition by Air China of Cathay Shares from
CITIC Pacific accordingly constitutes a connected transaction for Air
China for the purposes of the Listing Rules. As the acquisition by Air
China of Cathay Shares from CITIC Pacific falls outside the de minimis
thresholds in Rule 14A.31(2) and 14A.32 of the Listing Rules, it is
subject to the approval of the independent shareholders of Air China.
As at the date of this announcement Cathay beneficially holds 10.00% of
the shares in Air China. As such, Cathay is a substantial shareholder
and therefore a connected person of Air China under the Listing Rules.
Accordingly, the issue of Air China H Shares to Cathay constitutes a
connected transaction for Air China for the purposes of the Listing
Rules. As this will involve an issue of shares to a connected person
falling outside the scope of Rule 14A.31(3) of the Listing Rules, the
issue is subject to the approval of the independent shareholders of Air
China.
The issue of additional Air China H Shares to Cathay will also
constitute a variation of class rights and will be subject to approval
of shareholders by way of a special resolution at a general meeting of
Air China and approval of shareholders at separate class meetings of
Air China in accordance with Air China's articles of association and
applicable Listing Rules.
As mentioned above, Cathay is a connected person of Air China under the
Listing Rules. Accordingly, the sale of Dragonair Shares by CNAC
Limited (as a subsidiary of Air China) to Cathay and the acquisition of
Cathay Shares by CNAC Limited (as a subsidiary of Air China) each
constitutes a connected transaction for Air China for the purposes of
the Listing Rules. As the sale of Dragonair Shares and the acquisition
of Cathay Shares referred to above fall outside the de minimis in
Rule 14A.31(2) and 14A.32 of the Listing Rules, each of them is subject
to the approval of the independent shareholders of Air China.
The acquisition by Air China of Cathay Shares from CITIC Pacific and
SPAC, the issue of Air China H Shares to Cathay, the sale of Dragonair
Shares by CNAC Limited and the acquisition of new Cathay Shares by CNAC
Limited are integral parts of the Transaction. Accordingly, Cathay will
be required to abstain from voting in respect of any Air China H Shares
held by it or on its behalf as a connected person with a material
interest in the Transaction.
The acquisition of Cathay Shares by CNAC Limited (as a subsidiary of
Air China) from Cathay, when aggregated with the acquisition by Air
China of Cathay Shares from CITIC Pacific and SPAC, constitutes a major
transaction for Air China and is subject to the approval of the
shareholders of Air China.
Other regulatory matters
By reference to the audited consolidated net asset value of Dragonair
as at 31 December 2005 and after taking into consideration the relevant
costs of the disposal of Dragonair Shares by CNAC Limited to Cathay
(assuming that the disposal of Dragonair Shares and the execution of
the Restructuring Agreement, Shareholders Agreement and Operating
Agreement had been completed on 31 December 2005), a gain of
approximately HK$1,245 million (equivalent to RMB1,295 million), net of
the amount attributable to the relevant minority shareholders and the
goodwill in relation to the Dragonair Shares held by CNAC Limited,
would be credited to the consolidated profit and loss account of Air
China. Since the carrying value of the attributable equity interest in
Dragonair shared by Air China, its subsidiaries and joint ventures will
change over time and be subject to auditors' review, and the market
value of Cathay Shares issued by Cathay as consideration of the
acquisition of Dragonair Shares may change upon Completion, it is
expected that the actual gain or loss arising from the disposal of
Dragonair Shares by CNAC Limited and the execution of the Restructuring
Agreement, Shareholders Agreement and Operating Agreement to be
recorded in the consolidated profit and loss account of Air China will
be different from the aforesaid amount.
As at the date of this announcement, Air China has 3,226,532,000 H
shares, representing approximately 34.20% of the entire existing issued
share capital comprising 9,433,210,909 shares in Air China. The
additional 1,179,151,364 Air China H Shares represents approximately
36.5% and 12.5% of the existing issued Air China H Shares and existing
issued share capital in Air China, respectively. Immediately following
the issue of new Air China H Shares to Cathay, Air China will have
4,405,683,364 H shares, representing approximately 41.5% of the
enlarged issue capital comprising 10,612,362,273 shares in Air China.
The additional 1,179,151,364 of Air China H Shares represents
approximately 26.8% and 11.1% of the enlarged issued Air China H Shares
and enlarged issued share capital in Air China, respectively.
Air China will receive approximately HK$4.07 billion in cash as
consideration for Cathay's subscription for the additional Air China H
Shares. The cash proceeds will help finance the planned expansion of
Air China's fleet and other important business development initiatives.
CITIC Pacific at present holds 859,353,462 shares in Cathay, of which
286,451,154 shares were acquired at HK$8 per share and the remaining
572,902,308 shares were acquired at HK$11 per share. On Completion,
189,976,645 new shares will be issued by Cathay to CITIC Pacific for
the acquisition of 28.50% interest in Dragonair at HK$13.50 per share.
Air China's acquisition of Cathay Shares from CITIC Pacific and SPAC
will be funded by a combination of cash from internal resources and an
existing loan facility.
A circular giving further details of the Transaction, the views of the
independent non-executive directors of Air China and independent
financial adviser to Air China, together with a notice of the Air China
EGM will be dispatched to shareholders of Air China as soon as
practicable.
Details of the Transaction, to the extent they constitute connected
transactions for Air China, will also be included in Air China's next
annual report and accounts in accordance with Rule 14A.45 of the
Listing Rules.
(B) Cathay
Shareholder Approval
As at the date of this announcement, SPAC and CITIC Pacific
beneficially hold 46.30% and 25.40% of the shares in Cathay
respectively. As such, they are substantial shareholders of Cathay and
are connected persons of Cathay under the Listing Rules. Accordingly,
the acquisition of Dragonair Shares by Cathay from SPAC and CITIC
Pacific constitutes a connected transaction for Cathay for the purposes
of the Listing Rules. As the acquisition falls outside the de minimis
thresholds in Rule 14A.31(2) and 14A.32 of the Listing Rules, it is
subject to the approval of the independent shareholders of Cathay. Each
of SPAC and CITIC Pacific will be required to abstain from voting in
respect of any Cathay Shares held by them or on their behalf as a
connected person with a material interest in the transaction.
The allotment and issue of new Cathay Shares by Cathay to SPAC and
CITIC Pacific also constitutes a connected transaction for Cathay for
the purposes of the Listing Rules and is therefore subject to the
approval of the independent shareholders of Cathay. Each of SPAC and
CITIC Pacific will be required to abstain from voting in respect of any
Cathay Shares held by them or on their behalf as a connected person
with a material interest in the transaction.
As at the date of this announcement, Cathay has an authorised share
capital of 3,900,000,000 Cathay Shares, of which 3,382,784,348 Cathay
Shares have been issued. The number of new Cathay Shares to be issued
under the Transaction is 548,045,724. Accordingly, the Board proposes
to increase the authorised share capital of Cathay from 3,900,000,000
Cathay Shares to 5,000,000,000 Cathay Shares. The proposed increase of
the authorised share capital of Cathay is subject to the approval of
the shareholders of Cathay by way of an ordinary resolution.
The allotment and issue of new Cathay Shares to SPAC and CITIC Pacific
is subject to the approval of the shareholders of Cathay pursuant to
Rule 13.36(1)(a) of the Listing Rules. Each of SPAC and CITIC Pacific
will be required to abstain from voting in respect of any Cathay Shares
held by them or on their behalf as a shareholder with a material
interest in the above allotment and issue of new Cathay Shares.
Other regulatory matters
Based on the aggregation of the acquisition of Dragonair Shares by
Cathay from each of SPAC, CITIC Pacific, CNAC Limited and the Dragonair
Minority Shareholders, each of the percentage ratios set out in Rule
14.07 of the Listing Rules is more than 5% but less than 25%. Each of
such percentage ratios in relation to the subscription by Cathay for
additional Air China H Shares is also more than 5% but less than 25%.
As such, the acquisition of Dragonair Shares by Cathay and the
subscription by Cathay for additional Air China H Shares constitute
discloseable transactions for Cathay for the purposes of the Listing
Rules.
Cathay will finance the acquisition of Dragonair Shares by the issue of
new Cathay Shares and cash from internal resources.
The allotment and issue of new Cathay Shares to CNAC Limited and the
Dragonair Minority Shareholders will be issued out of the general
mandate given to the Cathay Directors at the annual general meeting of
Cathay on 10 May 2006.
Cathay confirms that, to the best of the Cathay Directors' knowledge,
information and belief having made all reasonable enquiry, the
Dragonair Minority Shareholders, Air China and CNAC Limited and their
ultimate beneficial owner(s) are third parties independent of Cathay
and connected persons of Cathay.
The original cost to SPAC for its shareholding in Dragonair is
HK$183,583,736. The Dragonair Shares to be sold by CITIC Pacific to
Cathay were purchased at HK$1.22 per share and HK$1.51 per share in
1990 and 1992 respectively.
A circular giving further details of the Transaction, the views of the
independent non-executive directors of Cathay and independent financial
adviser to Cathay, together with a notice of the Cathay EGM will be
dispatched to shareholders of Cathay as soon as practicable.
Details of the Transaction, to the extent they constitute connected
transactions for Cathay, will also be included in Cathay's next annual
report and accounts in accordance with Rule 14A.45 of the Listing
Rules.
(C) CNAC Limited
Shareholder Approval
As the assets and revenue ratios set out in Rule 14.07 of the Listing
Rules in respect of the sale by CNAC Limited of Dragonair Shares to
Cathay are more than 75%, such sale constitutes a very substantial
disposal for CNAC Limited for the purposes of the Listing Rules and is
therefore subject to the approval of the shareholders of CNAC Limited.
As the assets, profits and revenue ratios set out in Rule 14.07 of the
Listing Rules in respect of the acquisition of Cathay Shares by CNAC
Limited from Cathay are more than 100%, such acquisition constitutes a
very substantial acquisition for CNAC Limited for the purposes of the
Listing Rules and is therefore subject to the approval of the
shareholders of CNAC Limited. If Cathay is a shareholder of CNAC
Limited at the relevant time, it will be required to abstain from
voting in respect of any shares in CNAC Limited held by it or on its
behalf as a shareholder with a material interest in the transaction.
Air China, which is a party to the Restructuring Agreement, will be
required to abstain from voting in respect of any shares in CNAC
Limited held by it or on its behalf as a shareholder with a material
interest in the transaction.
Other regulatory matters
By reference to the audited consolidated net asset value of Dragonair
as at 31 December 2005 and after taking into consideration the relevant
costs of the disposal of Dragonair Shares by CNAC Limited to Cathay
(assuming that the disposal of Dragonair Shares and the execution of
the Restructuring Agreement, Shareholders Agreement and Operating
Agreement had been completed on 31 December 2005), a gain of
approximately HK$2,963 million would be credited to the consolidated
profit and loss account of CNAC Limited. Since the carrying value of
the attributable equity interest in Dragonair shared by CNAC Limited
and its subsidiaries will change over time and be subject to auditors'
review, and the market value of Cathay Shares issued by Cathay as
consideration of the acquisition of Dragonair Shares may change upon
Completion, it is expected that the actual gain or loss arising from
the sale of Dragonair Shares by CNAC Limited and the execution of the
Restructuring Agreement, Shareholders Agreement and Operating Agreement
to be recorded in the consolidated profit and loss account of CNAC
Limited will be different from the aforesaid amount.
CNAC Limited will receive 288.6 million Cathay Shares and approximately
HK$432.9 million in cash as consideration for the disposal of its
43.29% shareholding in Dragonair.
CNAC Limited's current intention is to hold these Cathay Shares as a
long-term investment. With regards to the cash proceeds, CNAC Limited
is currently considering appropriate uses of these funds in relation to
the further development of its existing and other aviation related
businesses. Should no attractive opportunities present themselves, CNAC
Limited may consider distributing the excess cash to its shareholders
in due course.
CNAC Limited confirms, to the best of the CNAC Limited Directors'
knowledge, information and belief having made all reasonable enquiry,
Cathay, CITIC Pacific and SPAC are third parties independent of CNAC
Limited and not connected persons of CNAC Limited.
Conditional Undertaking and Request for Privatization of CNAC Limited
On Ling Investments Limited, which beneficially owns approximately
9.75% of the issued share capital of CNAC Limited, has given a
conditional irrevocable undertaking to Air China and CNAC Limited to
vote in favour of the shareholder's resolution to be proposed at CNAC
Limited's shareholder's meeting to approve the sale by CNAC Limited of
Dragonair Shares to Cathay as described in this announcement. The
conditions precedent to On Ling's undertaking are:
(a) the publication of an announcement by or on behalf of Air China of
a privatization offer in cash for all the issued shares of CNAC
Limited, other than those already owned by Air China and parties acting
in concert with it, on terms no less favourable than HK$2.80 per CNAC
Limited Share; and
(b) the independent financial adviser to CNAC Limited's independent
board of directors committee is of the opinion that the terms of the
sale of the Dragonair Shares and the privatization referred to in
paragraph (a) above from a financial perspective are fair and
reasonable.
Following receipt of the conditional undertaking from On Ling
Investments Limited, CNAC Limited Directors have requested Air China to
privatize CNAC Limited by way of a scheme of arrangement, on the basis
that the offer price will be HK$2.80 per CNAC Limited share. Air China
is currently considering the request by CNAC Limited Directors and is
seeking the appropriate PRC regulatory approvals and financing to
proceed with the privatization offer. Air China is currently also in
the process of formulating the proposals for the privatization offer
and will issue an announcement if and as soon as the proposals are
finalized. As certain terms of the proposals are subject to various
external factors that are outside its control, Air China is not in a
position, as at the date of this announcement, to provide an estimate
of the timing for any announcement of a privatization offer.
As such, there is no certainty as to whether or not Air China will make
a privatization offer for CNAC Limited. Accordingly, shareholders and
potential investors in CNAC Limited should not assume that a
privatization offer will be made and should instead exercise caution in
dealing in CNAC Limited's shares.
The Executive takes the view that, if a privatization offer is made by
Air China pursuant to the request of CNAC Limited Directors, Air China
will have to make the offer in cash at HK$2.80 per CNAC Limited Share.
As at the date hereof, CNAC Limited has an issued share capital of
HK$331,268,000 comprising 3,312,680,000 CNAC Limited shares of HK$0.10
each and 104,378,000 outstanding options involving 104,378,000 CNAC
Limited shares of HK$0.10 each. Save as described above, CNAC Limited
has no other options, warrants or other securities issued by CNAC
Limited that carry a right to subscribe for or which are convertible
into CNAC Limited shares.
A circular giving further details of the Transaction, the views of the
independent non-executive directors of CNAC Limited and independent
financial adviser to CNAC Limited, together with a notice of the CNAC
Limited EGM will be dispatched to shareholders of CNAC Limited as soon
as practicable.
(D) CITIC Pacific
Shareholder Approval
As mentioned above, as at the date of this announcement, SPAC
beneficially holds 46.30% of the shares in Cathay. Accordingly, Cathay
is an associate of SPAC. SPAC is a substantial shareholder of a
subsidiary of CITIC Pacific. Cathay is therefore a connected person of
CITIC Pacific as an associate of a substantial shareholder of a
subsidiary of CITIC Pacific (SPAC). As such, the sale by CITIC Pacific
of Dragonair Shares to Cathay constitutes a connected transaction for
CITIC Pacific for the purposes of the Listing Rules. As the sale falls
outside the de minimis thresholds in Rule 14A.31(2) and 14A.32 of the
Listing Rules, it is subject to the approval of the independent
shareholders of Cathay.
As mentioned above, Cathay is a connected person of CITIC Pacific.
Accordingly, the acquisition of new Cathay Shares by CITIC Pacific as
consideration for the Dragonair Shares constitutes a connected
transaction for CITIC Pacific for the purposes of the Listing Rules. As
such acquisition falls outside the de minimis thresholds in Rule 14A.31
(2) and 14A.32 of the Listing Rules, it is subject to the approval of
the independent shareholders of CITIC Pacific.
Other regulatory matters
As the revenue and consideration ratios set out in Rule 14.07 of the
Listing Rules in respect of the sale by CITIC Pacific of Dragonair
Shares to Cathay are more than 5% but less than 25%, such sale
constitutes a discloseable transaction for CITIC Pacific for the
purposes of the Listing Rules.
Based on the acquisition by CITIC Pacific of new Cathay Shares
representing 4.83% of Cathay's enlarged issued share capital upon
completion of the Transaction (on the basis that new Cathay Shares will
be issued to all Dragonair Minority Shareholders whether because they
accept Cathay's offer or through compulsory acquisition), the assets,
revenue and consideration ratios set out in Rule 14.07 of the Listing
Rules in respect of the acquisition by CITIC Pacific of new Cathay
Shares are above 5% but less than 25%. Accordingly, such acquisition
constitutes a discloseable transaction for CITIC Pacific for the
purposes of the Listing Rules.
Based on 359,170,636 Cathay Shares to be sold by CITIC Pacific to Air
China, each of the percentage ratios set out in Rule 14.07 of the
Listing Rules is more than 5% but less than 25%. As such, the sale by
CITIC Pacific of Cathay Shares to Air China constitutes a discloseable
transaction for CITIC Pacific for the purposes of the Listing Rules.
The transaction provides CITIC Pacific an attractive exit price for its
shares in Dragonair. CITIC Pacific will sell shares in Cathay at above
the prevailing market price at the date of this announcement and will
retain a 17.50% stake in Cathay to share in the benefits of the
combination of Cathay and Dragonair and operational cooperation with
Air China as outlined above. CITIC Pacific intends to hold the shares
of Cathay as a long term investment. The CITIC Pacific Directors
estimate that, with reference to the projected carrying value of the
investment in Cathay and Dragonair but subject to the exact completion
date, an estimated profit of approximately HK$2 billion will arise from
the transaction.
The transaction allows CITIC Pacific to realise cash of approximately
HK$5 billion (excluding the special dividend intended to be distributed
following completion), to be used for pursuing developments of the core
businesses that CITIC Pacific actively manages to leverage off of its
expertise.
A circular giving further details of the Transaction, the views of the
independent non-executive directors of CITIC Pacific and independent
financial adviser to CITIC Pacific, together with a notice of the CITIC
Pacific EGM will be dispatched to shareholders of CITIC Pacific as soon
as practicable.
Details of the Transaction, to the extent they constitute connected
transactions for CITIC Pacific, will also be included in CITIC
Pacific's next annual report and accounts in accordance with Rule
14A.45 of the Listing Rules.
(E) SPAC
This joint announcement is made, in the case of SPAC, under Rule 13.09
of the Listing Rules.
(F) Miscellaneous
This announcement is for information purposes only and does not
constitute an invitation or offer to acquire, purchase or subscribe for
any Cathay Shares.
Application to the Exchange will be made by Cathay for the listing of
and permission to deal in the new Cathay Shares.
This announcement is for information purposes only and does not
constitute an invitation or offer to acquire, purchase or subscribe for
any Air China H Shares.
Application to the Exchange will be made by Air China for the listing
of and permission to deal in the new Air China H Shares.
As at the date of this announcement, Cathay holds 1.953% of the shares
in CNAC Limited. As indicated elsewhere in this announcement, it is
possible that a privatization offer will be made for the shares in CNAC
Limited. Under Rule 25 of the Takeovers Code, Air China as offeror
under the privatization offer is precluded from making arrangements
with shareholders of CNAC Limited which have favourable conditions
which are not to be extended to all shareholders of CNAC Limited. Given
that the subscription by Cathay for Air China H shares, the sales by
SPAC and CITIC Pacific of Cathay Shares to Air China and the
acquisition by Cathay of Dragonair Shares from CNAC Limited, each as
contemplated by this announcement, are arrangements to which Rule 25 of
the Takeovers Code may apply. Cathay has decided to cease to be a
shareholder in CNAC Limited and will donate all of its shares in CNAC
Limited to a number of charities independent of Cathay and SPAC. Cathay
is starting to take steps to this end. Further details will be given in
the document containing the privatization offer.
At the request of each of Air China, Cathay, CNAC Limited, CITIC
Pacific and SPAC, trading in shares in each of them on the Exchange was
suspended with effect from 9:30 a.m. (in the case of Cathay, CITIC
Pacific and SPAC) and 9:31 a.m. (in the case of Air China and CNAC
Limited) on 5 June 2006 pending the issue of this announcement.
Application has been made by each of Air China, Cathay, CNAC Limited,
CITIC Pacific and SPAC to the Exchange for the resumption of trading in
each of their shares with effect from 9:30 a.m. on 9 June 2006.
All references in this announcement to number of Cathay Shares and
percentage holding in Cathay Shares following the date of this
announcement assume there will be no further issue of Cathay Shares
pursuant to the exercise of share options granted under Cathay's share
option scheme adopted on 10 March 1999 following the date of this
announcement. All references in this announcement to number of shares
in Air China and percentage holding in shares in Air China following
the date of this announcement assume there will be no issue of A shares
by Air China.
DEFINITIONS
In this announcement, the following terms have the meanings set out
below, unless the context requires otherwise:
Air China Air China Limited, a company incorporated in the
People's Republic of China and whose H shares are
listed on the Exchange as its primary listing venue
and on the Official List of the UK Listing Authority
as its secondary listing venue
Air China the directors of Air China
Directors
Air China EGM the extraordinary general meeting of Air China to be
held to seek approval of shareholders of Air China
referred to this announcement
Air China Group Air China, its subsidiaries and joint ventures
Air China H Shares H shares of RMB1.00 each in the capital of Air China
Business Day a day (other than a Saturday or Sunday) on which
banks are open for business in Hong Kong
Cathay Cathay Pacific Airways Limited, a company
incorporated in Hong Kong and whose shares are listed
on the Exchange
Cathay Board the board of directors of Cathay
Cathay Directors the directors of Cathay
Cathay EGM the extraordinary general meeting of Cathay to be
held to seek approval of shareholders of Cathay
referred to this announcement
Cathay Share the issued share capital of Cathay from time to time
Capital
Cathay Shares ordinary shares of HK$0.20 each in the capital of
Cathay
CITIC Pacific CITIC Pacific Limited, a company incorporated in Hong
Kong and whose shares are listed on the Exchange
CITIC Pacific the directors of CITIC Pacific
Directors
CITIC Pacific EGM the extraordinary general meeting of CITIC Pacific to
be held to seek approval of shareholders of CITIC
Pacific referred to this announcement
Completion completion of the offer for Dragonair Shares, sale
and purchase of Cathay Shares and subscription of Air
China H Shares as referred to in this announcement
under the headings 'Description of the Transaction -
Purchase of Dragonair Shares and issue of new Cathay
Shares', 'Description of the Transaction - Purchase
of Cathay Shares' and 'Description of the Transaction
- Acquisition of additional Air China H Shares'
respectively
CNAC Limited China National Aviation Company Limited, a company
incorporated in Hong Kong and whose shares are listed
on the Exchange
CNAC Limited the directors of CNAC
Directors
CNAC Limited EGM the extraordinary general meeting of CNAC Limited to
be held to seek approval of shareholders of CNAC
Limited referred to this announcement
CNAHC China National Aviation Holding Company
Dragonair Hong Kong Dragon Airlines Limited, a company
incorporated in Hong Kong
Dragonair Minority each holder of Dragonair Shares other than SPAC,
Shareholders CITIC Pacific, CNAC Limited or Cathay, or any person
who holds Dragonair Shares on their behalf, holding
in aggregate 13,552,750 Dragonair Shares
Dragonair Shares ordinary shares of HK$1.00 each in the capital of
Dragonair
Exchange The Stock Exchange of Hong Kong Limited
Executive the Executive Director of the Corporate Finance
Division of the SFC
Last Trading Date 2 June 2006, being the last trading date prior to the
suspension of trading of Cathay, Air China, CNAC
Limited, CITIC Pacific and SPAC on 5 June 2006
Listing Rules The Rules Governing the Listing of Securities on The
Stock Exchange of Hong Kong Limited
Operating the operating agreement dated 8 June 2006 between Air
Agreement China and Cathay pursuant to which Air China and
Cathay have agreed to co??operate in various
operational areas
Placing the sale by SPAC and CITIC Pacific of Cathay Shares
in the 12-month period following Completion as
referred to in this announcement under the heading
'Description of the Transaction - Placing'
Restructuring the restructuring agreement dated 8 June 2006 between
Agreement SPAC, CITIC Pacific, CNAC Limited, Air China and
Cathay in relation to the Transaction
SFC Securities and Futures Commission of Hong Kong
Shareholders SPAC, CITIC Pacific, Air China and CNAC Limited
Shareholders the shareholders agreement dated 8 June 2006 between
Agreement SPAC, CITIC Pacific, CNAC Limited and Air China
regulating their relationship as shareholders of
Cathay following implementation of the Transaction
SPAC Swire Pacific Limited, a company incorporated in Hong
Kong and whose shares are listed on the Exchange
Takeovers Code The Hong Kong Code on Takeovers and Mergers
Transaction the restructuring of the shareholdings in Dragonair
and Cathay and the acquisition by Cathay of
additional Air China H Shares, in each case in
accordance with the terms of the Restructuring
Agreement, but does not include the Placing
Directors
As at the date of this announcement, the directors of Air China are:
Non-Executive Directors: Li Jiaxiang (Chairman), Kong Dong, Wang
Shixiang, Yao Weiting; Executive Directors: Ma Xulun, Cai Jianjiang, Fan
Cheng; and Independent Non-Executive Directors: Hu Hung Lick, Henry, Wu Zhipan
and Zhang Ke.
As at the date of this announcement, the directors of Cathay are:
Executive Directors: Christopher Pratt (Chairman), Robert Atkinson,
Philip Chen, Derek Cridland and Tony Tyler;
Non-Executive Directors: Martin Cubbon, Henry Fan, James Hughes-Hallett,
Davy Ho, Vernon Moore, Carl Yung and Zhang Xianlin; and
Independent Non-Executive Directors: Peter Lee, Raymond Or, Jack So and
Tung Chee Chen.
As at the date of this announcement, the directors of CNAC Limited are:
Executive Directors: Kong Dong (Chairman), Chuang Shih Ping, Zhang
Xianlin, Zhao Xiaohang, Tsang Hing Kwong, Thomas and Gu Tiefei; and
Independent Non-Executive Directors: Lok Kung Nam, Hu Hung Lick, Henry,
Ho Tsu Kwok, Charles, Li Kwok Heem, John and Chan Ching Har, Eliza.
As at the date of this announcement, the directors of CITIC Pacific are:
Executive Directors: Larry Yung Chi Kin (Chairman), Henry Fan Hung Ling,
Peter Lee Chung Hing, Norman Yuen Kee Tong, Vernon Francis Moore, Li
Shilin, Carl Yung Ming Jie, Liu Jifu, Leslie Chang Li Hsien, Chau Chi
Yin, Milton Law Ming To and Wang Ande;
Non-Executive Directors: Willie Chang, Andre Desmarais and Peter Kruyt
(alternate director to Andre Desmarais);
Independent Non-Executive Directors: Hamilton Ho Hau Hay, Alexander Reid
Hamilton, Hansen Loh Chung Hon and Norman Ho Hau Chong.
As at the date of this announcement, the directors of SPAC are:
Executive Directors: Christopher Pratt (Chairman), Philip Chen, Martin
Cubbon, Davy Ho; Keith Kerr and John Slosar;
Non-Executive Directors: Baroness Dunn, James Hughes-Hallett, Peter
Johansen and Sir Adrian Swire; and
Independent Non-Executive Directors: Clement Kwok, Chien Lee, Marjorie
Yang, Michael Sze and Vincent Cheng.
By order of the Board of By order of the Board of
Air China Limited Cathay Pacific Airways Limited
Zheng Baoan Li Man Kit David Fu
Joint Company Secretaries Company Secretary
Beijing, 8 June 2006 Hong Kong, 8 June 2006
By order of the Board of By order of the Board of
China National Aviation Company CITIC Pacific Limited
Limited Alice Tso Mun Wai
Li Man Kit Company Secretary
Company Secretary Hong Kong, 8 June 2006
Hong Kong, 8 June 2006
By order of the Board of
Swire Pacific Limited
David Fu
Company Secretary
Hong Kong, 8 June 2006
In accordance with Rule 3.8 of the Takeovers Code, reproduced below is
the full text of Note 11 to Rule 22 of the Takeovers Code:
'Responsibilities of stockbrokers, banks and other intermediaries
Stockbrokers, banks and others who deal in relevant securities on behalf
of clients have a general duty to ensure, so far as they are able, that
those client are aware of the disclosure obligations attaching to
associates and other persons under Rule 22 and that those clients are
willing to comply with them. Principal traders and dealers who deal
directly with investors should, in appropriate cases, likewise draw
attention to the relevant Rules. However, this does not apply when the
total value of dealings (excluding stamp duty and commission) in any
relevant security undertaken for a client during any 7 day period is
less than $1 million.
This dispensation does not alter the obligations of principals,
associates and other persons themselves to initiate disclosure of their
own dealings, whatever the total value is involved.
Intermediaries are expected to co-operate with the Executive in its
dealings enquires. Therefore, those who deal in relevant securities
should appreciate that stockbrokers and other intermediaries will supply
the Executive with relevant information as to those dealings, including
identities of clients, as part of that co-operation.'
The directors of Air China jointly and severally accept full
responsibility for the accuracy of the information contained in this
announcement (other than that relating to Cathay, SPAC, CITIC Pacific
and CNAC Limited) and confirm, having made all reasonable enquires, that
to the best of their knowledge, opinions expressed in this announcement
(other than those of Cathay, SPAC, CITIC Pacific and CNAC Limited) have
been arrived at after due and careful consideration and there are no
other facts (other than those relating to Cathay, SPAC, CITIC Pacific
and CNAC Limited) not contained in this announcement, the omission of
which would make any statements in this announcement misleading.
The directors of Cathay jointly and severally accept full responsibility
for the accuracy of the information contained in this announcement
(other than that relating to Air China, SPAC, CITIC Pacific and CNAC
Limited) and confirm, having made all reasonable enquires, that to the
best of their knowledge, opinions expressed in this announcement (other
than those of Air China, SPAC, CITIC Pacific and CNAC Limited) have been
arrived at after due and careful consideration and there are no other
facts (other than those relating to Air China, SPAC, CITIC Pacific and
CNAC Limited) not contained in this announcement, the omission of which
would make any statements in this announcement misleading.
The directors of SPAC jointly and severally accept full responsibility
for the accuracy of the information contained in this announcement
(other than that relating to Cathay, Air China, CITIC Pacific and CNAC
Limited) and confirm, having made all reasonable enquires, that to the
best of their knowledge, opinions expressed in this announcement (other
than those of Cathay, Air China, CITIC Pacific and CNAC Limited) have
been arrived at after due and careful consideration and there are no
other facts (other than those relating to Cathay, Air China, CITIC
Pacific and CNAC Limited) not contained in this announcement, the
omission of which would make any statements in this announcement
misleading.
The directors of CITIC Pacific jointly and severally accept full
responsibility for the accuracy of the information contained in this
announcement (other than that relating to Cathay, SPAC, Air China and
CNAC Limited) and confirm, having made all reasonable enquires, that to
the best of their knowledge, opinions expressed in this announcement
(other than those of Cathay, SPAC, Air China and CNAC Limited) have been
arrived at after due and careful consideration and there are no other
facts (other than those relating to Cathay, SPAC, Air China and CNAC
Limited) not contained in this announcement, the omission of which would
make any statements in this announcement misleading.
Other than Mr. Li Kwok Heem, John and Ms. Chan Ching Har, Eliza who are
not contactable, the directors of CNAC Limited jointly and severally
accept full responsibility for the accuracy of the information contained
in this announcement (other than that relating to Cathay, SPAC, CITIC
Pacific and Air China) and confirm, having made all reasonable enquires,
that to the best of their knowledge, opinions expressed in this
announcement (other than those of Cathay, SPAC, CITIC Pacific and Air
China) have been arrived at after due and careful consideration and
there are no other facts (other than those relating to Cathay, SPAC,
CITIC Pacific and Air China) not contained in this announcement, the
omission of which would make any statements in this announcement
misleading.
Please also refer to the published version of this announcement in The
Standard.
This information is provided by RNS
The company news service from the London Stock Exchange
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