REG - Air China Ld - CONTINUING CONNECTED TRANSACTION
31/10/2025 09:45
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RNS Number : 7022F Air China Ld 31 October 2025
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)
CONTINUING CONNECTED TRANSACTION
CONTINUING CONNECTED TRANSACTION
On 30 October 2025, the Company entered into the Aircraft Sales Framework
Agreement with Beijing Leasing Company, pursuant to which, during the term
specified in the Aircraft Sales Framework Agreement, the Company will sell
aircraft owned by the Company to Beijing Leasing Company from time to time by
way of agreement transfer. The Aircraft Sales Framework Agreement has a valid
term from 30 October 2025 to 31 December 2027.
HONG KONG LISTING RULES IMPLICATIONS
Beijing Leasing Company is owned as to 60% by CNACG and 40% by CNAC Holding,
both of which are in turn wholly-owned subsidiaries of CNAHC, the controlling
shareholder of the Company. As such, Beijing Leasing Company is a connected
person of the Company as defined under the Hong Kong Listing Rules, and
accordingly the transactions under the Aircraft Sales Framework Agreement
constitute continuing connected transactions of the Company under Chapter 14A
of the Hong Kong Listing Rules.
As the highest applicable percentage ratio in respect of the annual caps of
the transactions for each year under the Aircraft Sales Framework Agreement is
higher than 0.1% but less than 5%, the transactions under the Aircraft Sales
Framework Agreement are subject to the announcement and annual review
requirements under Chapter 14A of the Hong Kong Listing Rules but are exempt
from the Independent Shareholders' approval requirement.
I. AIRCRAFT SALES FRAMEWORK AGREEMENT
On 30 October 2025, the Company entered into the Aircraft Sales Framework
Agreement with Beijing Leasing Company, pursuant to which, during the term
specified in the Aircraft Sales Framework Agreement, the Company will sell
aircraft owned by the Company to Beijing Leasing Company from time to time by
way of agreement transfer. The Aircraft Sales Framework Agreement has a valid
term from 30 October 2025 to 31 December 2027.
1. Parties and the relationship between the parties
The Company's principal business activity is air passenger, air cargo and
airline-related services.
Beijing Leasing Company is owned as to 60% by CNACG and 40% by CNAC Holding,
both of which are in turn wholly-owned subsidiaries of CNAHC, the controlling
shareholder of the Company. As such, Beijing Leasing Company is a connected
person of the Company as defined under the Hong Kong Listing Rules. Beijing
Leasing Company is mainly engaged in finance leasing business and leasing
business; purchase of rental property from domestic and international sources;
residual value disposal and maintenance of rental property; lease transaction
consultation and guarantee; import and export of goods, import and export of
technology, and import and export agency.
As at the date of this announcement, CNAHC directly holds 42.53% of the
Company's shares and, through CNACG, its wholly-owned subsidiary, holds 11.18%
of the Company's shares, and is the controlling shareholder of the Company. As
at the date of this announcement, the State-owned Assets Supervision and
Administration Commission of the State Council is the controlling shareholder
and de facto controller of CNAHC. CNAHC primarily operates all the state-owned
assets and state-owned equity interests invested by the State in CNAHC and its
invested entities, aircraft leasing and aviation equipment and facilities
maintenance businesses.
2. Description of the transactions under the Aircraft Sales Framework Agreement
Pursuant to the Aircraft Sales Framework Agreement, during the term specified
in the Aircraft Sales Framework Agreement, the Company will sell the aircraft
owned by the Company to Beijing Leasing Company from time to time by way of
agreement transfer, and Beijing Leasing Company will pay the consideration to
the Company. The parties will enter into specific agreement(s) regarding
specific matters such as payment of the consideration and the rights and
obligations of each party.
3. Pricing policies
The consideration under the Aircraft Sales Framework Agreement shall be
determined through arm's length negotiations between the Company and Beijing
Leasing Company on normal commercial terms. The aircraft sale price, exclusive
of tax, shall be the aircraft appraisal value appraised by an independent
third-party valuer.
4. The term of the Aircraft Sales Framework Agreement
The Aircraft Sales Framework Agreement shall become effective upon signing by
both parties on 30 October 2025 and shall remain in effect from 30 October
2025 to 31 December 2027, and may be renewed automatically for successive
terms of three years each, subject to the fulfilment of requirements under the
Hong Kong Listing Rules/the Shanghai Listing Rules and the approval procedures
required under the Hong Kong Listing Rules/the Shanghai Listing Rules. Before
expiry of the term of the Aircraft Sales Framework Agreement, the Board will
reassess the terms and conditions of the Aircraft Sales Framework Agreement,
and the Company will re-comply with the relevant rules governing connected
transactions under the Hong Kong Listing Rules/the Shanghai Listing Rules.
During the term of the Aircraft Sales Framework Agreement, the agreement can
be terminated upon the expiry on any 31 December by either party thereto by
serving the other party a prior written notice of not less than three months.
5. Reasons for and benefits of the transactions under the Aircraft Sales Framework Agreement
Over the coming years, a portion of the Company's old narrow-body aircraft
will progressively enter the phase-out cycle. To optimize the fleet structure
and enhance fleet operational efficiency, the Company intends to progressively
complete the retirement of these aircraft. The introduction of new high
fuel-efficient aircraft following the retirement of the aforesaid aircraft
will effectively enhance the fleet's profitability and further establish
long-term advantages for the fleet. Established in 2015, Beijing Leasing
Company specializes in aviation asset leasing and value re-engineering. The
Company intends to enter into the Aircraft Sales Framework Agreement with
Beijing Leasing Company to increase the certainty of aircraft sales and
shorten the aircraft sales cycle by leveraging the relevant expertise of
Beijing Leasing Company in aircraft-related assets. By implementing the
concept of high-quality development, the continuing connected transaction is
conducive to enhancing operational efficiency, and capacity and standard in
green development of the Company, thereby boosting the operating efficiency
and yield performance of the Company's fleet.
6. Historical amounts and annual caps and basis of determination
As at the date of this announcement, the Company has not sold any aircraft to
Beijing Leasing Company and therefore no amount has been incurred in respect
thereof.
The table below sets out the corresponding annual caps from the Effective Date
to 31 December 2027:
Unit: RMB million
Annual Caps
For the Period from For the Year ending 31 December 2026 For the Year ending 31 December 2027
30 October 2025 to
31 December 2025
The total amount of aircraft sale price to be paid by Beijing Leasing Company 120 840 840
to the Company under the Aircraft Sales Framework Agreement
In arriving at the annual caps above, the Company has considered the following
factors:
(i) the Company's estimated number and models of narrow-body aircraft to be
sold under the 2025-2027 aircraft phase-out plan based on fleet age and the
need of optimizing fleet structure, and (ii) the estimated transaction amount
per aircraft with reference to the market price of old narrow-body aircraft
aged approximately 20 years. The number of aircraft to be sold under the
Aircraft Sales Framework Agreement is expected not to exceed the total number
of narrow-body aircraft scheduled for phase-out in the 2025-2027 aircraft
phase-out plan.
7. Internal control procedures
The Group has adopted the following internal control procedures to ensure that
the transactions under the Aircraft Sales Framework Agreement will be
conducted on normal commercial terms, and in accordance with the Aircraft
Sales Framework Agreement and the pricing policies of the Group:
• Before entering into the transactions under the Aircraft Sales
Framework Agreement, the Finance Department, the Legal Department, the Asset
Management Department (which has a dedicated subdivision responsible for the
management of connected transactions) and if applicable, certain other
relevant departments of the Company will review the proposed terms for the
transactions under the Aircraft Sales Framework Agreement and discuss with the
relevant business department of the Group to ensure that the transactions
under the Aircraft Sales Framework Agreement are conducted on normal
commercial terms and in compliance with the pricing policies of the Group
before these relevant departments approve the finalized transaction agreements
according to their authority within the Group.
• The Asset Management Department of the Company is responsible for
overseeing the connected transactions of the Company. The Asset Management
Department will review and assess the balance amount of the annual cap for the
transactions under the Aircraft Sales Framework Agreement on a regular basis
and if the annual cap for the transactions under the Aircraft Sales Framework
Agreement is expected to be exceeded for a particular year, it will report to
the management and take appropriate measures in accordance with the relevant
requirements of the Hong Kong Listing Rules and/or the Shanghai Listing Rules.
• The Company's Internal Audit Department is responsible for performing
annual assessment on the internal control procedures of the Group, including
but not limited to the relevant information on the management of continuing
connected transactions. In addition, the Internal Audit Department is
responsible for compiling the annual internal control assessment report and
submitting the report to the Board for examination and approval.
• The independent auditor of the Company and the independent
non-executive Directors will conduct an annual review on the continuing
connected transactions of the Group.
II. HONG KONG LISTING RULES IMPLICATIONS
Beijing Leasing Company is owned as to 60% by CNACG and 40% by CNAC Holding,
both of which are in turn wholly-owned subsidiaries of CNAHC, the controlling
shareholder of the Company. As such, Beijing Leasing Company is a connected
person of the Company as defined under the Hong Kong Listing Rules, and
accordingly the transactions under the Aircraft Sales Framework Agreement
constitute continuing connected transactions of the Company under Chapter 14A
of the Hong Kong Listing Rules.
As the highest applicable percentage ratio in respect of the annual caps of
the transactions for each year under the Aircraft Sales Framework Agreement is
higher than 0.1% but less than 5%, the transactions under the Aircraft Sales
Framework Agreement are subject to the announcement and annual review
requirements under Chapter 14A of the Hong Kong Listing Rules but are exempt
from the Independent Shareholders' approval requirement.
Mr. Liu Tiexiang, Mr. Wang Mingyuan, Mr. Cui Xiaofeng and Mr. Xiao Peng, being
the Directors of the Company also holding directorship in CNAHC, are
considered to have material interests in the transactions under the Aircraft
Sales Framework Agreement and therefore have abstained from voting on the
relevant Board resolution in respect of the transactions under the Aircraft
Sales Framework Agreement. Save as disclosed above, none of the Directors have
a material interest in the transactions under the Aircraft Sales Framework
Agreement and hence no other Director is required to abstain from voting on
the relevant Board resolution.
The Board (including the independent non-executive Directors) considers that
the terms and conditions of the transactions under the Aircraft Sales
Framework Agreement are fair and reasonable. Such continuing connected
transactions are on normal commercial terms or better and in the ordinary and
usual course of business of the Group, and are in the interests of the Company
and its Shareholders as a whole. The Board also considers that the annual caps
under the Aircraft Sales Framework Agreement are fair and reasonable.
DEFINITIONS
In this announcement, unless the context otherwise requires, the following
terms shall have the meanings as set out below:
"Aircraft Sales Framework Agreement" the aircraft sales continuing connected transaction framework agreement dated
30 October 2025 entered into between the Company and Beijing Leasing Company
"associate(s)" has the meaning ascribed to it under the Hong Kong Listing Rules
"Beijing Leasing Company" CNAC Beijing Financial Leasing Co., Ltd.
(中航（北京）融資租賃有限公司)
"Board" the board of Directors of the Company
"CNAC Holding" China National Aviation Capital Holding Co., Ltd., a wholly-owned subsidiary
of CNAHC
"CNACG" China National Aviation Corporation (Group) Limited, a company incorporated
under the laws of Hong Kong and a wholly-owned subsidiary of CNAHC and a
substantial shareholder of the Company, which directly holds approximately
11.18% of the Company's issued share capital as at the date of this
announcement
"CNAHC" China National Aviation Holding Corporation Limited, a PRC state- owned
enterprise and the controlling shareholder of the Company, directly and
through its wholly-owned subsidiary CNACG, holding approximately 53.71% of the
issued share capital of the Company in aggregate as at the date of this
announcement
"Company" or "Air China" Air China Limited, a company incorporated in the PRC, whose H Shares are
listed on the Hong Kong Stock Exchange as its primary listing venue and on the
Official List of the UK Listing Authority as its secondary listing venue, and
whose A Shares are listed on the Shanghai Stock Exchange. The Company is
principally engaged in providing air passenger, air cargo and related services
"connected person(s)" has the meaning ascribed to it under the Hong Kong Listing Rules
"Director(s)" the director(s) of the Company
"Effective Date" the date on which the Aircraft Sales Framework Agreement becomes effective,
namely 30 October 2025
"Group" the Company and its subsidiaries from time to time
"HK$" Hong Kong dollar, the lawful currency of Hong Kong
"Hong Kong" Hong Kong Special Administrative Region of the PRC
"Hong Kong Listing Rules" The Rules Governing the Listing of Securities on the Hong Kong Stock Exchange
"Hong Kong Stock Exchange" The Stock Exchange of Hong Kong Limited
"H Share(s)" ordinary share(s) in the share capital of the Company, with a nominal value of
RMB1.00 each, which are listed on the Hong Kong Stock Exchange as primary
listing venue and have been admitted into the Official List of the UK Listing
Authority as secondary listing venue
"H Shareholder(s)" holders of the H Shares
"RMB" Renminbi, the lawful currency of the PRC
"Shanghai Listing Rules" the Rules Governing the Listing of Stocks on Shanghai Stock Exchange
"Shareholder(s)" holder(s) of the shares of the Company
"substantial shareholder(s)" has the meaning ascribed to it under the Hong Kong Listing Rules
"%" per cent
By Order of the Board
Air China Limited
Xiao Feng
Company Secretary
Beijing, the PRC, 30 October 2025
As at the date of this announcement, the directors of the Company are Mr. Liu
Tiexiang, Mr. Wang Mingyuan, Mr. Cui Xiaofeng, Mr. Patrick Healy, Mr. Xiao
Peng, Mr. Xu Niansha*, Mr. He Yun*, Ms. Winnie Tam Wan-chi* and Mr. Gao
Chunlei*.
* Independent non-executive director of the Company
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