REG - Air China Ld - PROPOSED ISSUANCE OF A SHARES TO SPECIFIC INVESTOR
31/10/2025 08:00
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RNS Number : 6687F 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.
This announcement is for information purposes only and does not constitute an
invitation or offer to acquire, purchase or subscribe for the securities of
Air China Limited.
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)
PROPOSED ISSUANCE OF A SHARES TO SPECIFIC INVESTOR
Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders
BAOQIAO PARTNERS CAPITAL LIMITED
CONNECTED TRANSACTION: PROPOSED ISSUANCE OF A SHARES TO SPECIFIC INVESTORS
On 30 October 2025, the Board approved the Issuance of A Shares to Specific
Investors, pursuant to which the Company has entered into the Subscription
Agreement with CNAHC and CNAC Holding for the issuance of not more than
3,044,140,030 new A Shares (inclusive) to CNAHC and CNAC Holding aggregately
at the Issue Price (i.e. RMB6.57 per Share) with expected gross proceeds
(before deducting relevant issuance expenses) of not more than RMB20.00
billion (inclusive). Among which, CNAHC intends to subscribe for no less than
RMB5.00 billion and CNAC Holding intends to subscribe for no more than
RMB15.00 billion.
HONG KONG LISTING RULES IMPLICATIONS
The new A Shares under the Issuance of A Shares to Specific Investors will be
issued pursuant to the specific mandates to be sought from the Shareholders at
the EGM. The Issuance of A Shares to Specific Investors is conditional upon,
among others, the approval of the relevant resolutions at the EGM.
Since CNAHC is the controlling shareholder of the Company and CNAC Holding is
a wholly owned subsidiary of CNAHC, CNAHC and CNAC Holding are connected
persons of the Company, and the Issuance of A Shares to Specific Investors
constitutes a connected transaction of the Company under Chapter 14A of the
Hong Kong Listing Rules and is subject to the announcement, reporting and
independent shareholders' approval requirements.
The Independent Board Committee comprising all the independent non-executive
Directors has been formed to advise the Independent Shareholders on the
Issuance of A Shares to Specific Investors. BaoQiao Partners has been
appointed as the Independent Financial Adviser to advise the Independent Board
Committee and the Independent Shareholders on the Issuance of A Shares to
Specific Investors.
GENERAL INFORMATION
The EGM will be convened by the Company for the Shareholders to consider and,
if thought fit, approve the resolutions in respect of, among other things, the
Issuance of A Shares to Specific Investors.
A circular containing, among others, details of the Issuance of A Shares to
Specific Investors together with a notice convening the EGM will be published
on or before 31 December 2025, to allow sufficient time for the preparation of
the relevant information for inclusion in the circular.
The Company advises the Shareholders and potential investors to note that the Issuance of A Shares to Specific Investors is subject to the satisfaction of certain conditions, and therefore the Issuance of A Shares to Specific Investors may or may not proceed. Accordingly, they are advised to exercise caution when dealing in the securities of the Company.
1. INTRODUCTION
On 30 October 2025, the Board approved the Issuance of A Shares to Specific
Investors, pursuant to which the Company has entered into the Subscription
Agreement with CNAHC and CNAC Holding for the issuance of not more than
3,044,140,030 new A Shares (inclusive) to CNAHC and CNAC Holding aggregately
at the Issue Price (i.e. RMB6.57 per Share) with expected gross proceeds
(before deducting relevant issuance expenses) of not more than RMB20.00
billion (inclusive). Among which, CNAHC intends to subscribe for no less than
RMB5.00 billion and CNAC Holding intends to subscribe for no more than
RMB15.00 billion.
In respect of the Issuance of A Shares to Specific Investors, the Board has
approved the following resolutions: (1) the resolution in relation to the
satisfaction of the Company of the conditions for the Issuance of A Shares to
Specific Investors; (2) the resolution in relation to the proposal of the
Issuance of A Shares to Specific Investors by the Company in 2025; (3) the
resolution in relation to the preliminary proposal of the Issuance of A Shares
to Specific Investors by the Company in 2025; (4) the resolution in relation
to the discussion and analysis report on the proposal of the Issuance of A
Shares to Specific Investors by the Company in 2025; (5) the resolution in
relation to the feasibility analysis report on the use of proceeds from the
Issuance of A Shares to Specific Investors by the Company in 2025; (6) the
resolution in relation to the dilution of the Company's current return from
the Issuance of Shares to Specific Investors in 2025, the remedial measures
and the undertakings made by the relevant entities in respect of such
measures; (7) the resolution in relation to the report on use of proceeds from
previous fund-raising activities of the Company; (8) the resolution in
relation to the related (connected) transaction concerning the entering into
of the conditional A share subscription agreement with specific investors by
the Company; (9) the resolution in relation to future plan for dividend
returns to the Shareholders for the coming three years (2025-2027); and (10)
the resolution in relation to the authorization by the Shareholders' meeting
to the Board and its authorized person(s) to proceed with relevant matters in
respect of the Issuance of Shares to Specific Investors by the Company in
their sole discretion.
2. THE ISSUANCE OF A SHARES TO SPECIFIC INVESTORS
Pursuant to the proposal of the Issuance of A Shares to Specific Investors,
the Company has entered into the Subscription Agreement with CNAHC and CNAC
Holding for the issuance of not more than 3,044,140,030 new A Shares
(inclusive) to CNAHC and CNAC Holding aggregately at the Issue Price (i.e.
RMB6.57 per Share) with expected gross proceeds (before deducting relevant
issuance expenses) of not more than RMB20.00 billion (inclusive).
2.1 Proposal of the Issuance of A Shares to Specific Investors
Summary of the proposal of the Issuance of A Shares to Specific Investors is
set out as follows:
(1) Type and par value of Shares issued: The type of shares to be issued to specific investors is domestically listed
Renminbi ordinary shares (A Shares), with a nominal value of RMB1.00 per
Share.
(2) Method and time of issue: The Issuance will be undertaken by way of issuance to specific investors at an
appropriate timing within the valid term after the review and approval of the
Shanghai Stock Exchange and upon obtaining the consent of the CSRC for
registration.
(3) Subscribers and method of subscription: The subscribers under the Issuance of A Shares to Specific Investors are CNAHC
and CNAC Holding. CNAHC and CNAC Holding intend to subscribe in cash for all
the A Shares to be issued by the Company under the Issuance. Among which,
CNAHC intends to subscribe for no less than RMB5 billion and CNAC Holding
intends to subscribe for no more than RMB15 billion.
As at the date of this announcement, since CNAHC is the controlling
shareholder of the Company and CNAC Holding is a wholly owned subsidiary of
CNAHC, CNAHC and CNAC Holding are connected persons of the Company and the
Issuance of A Shares to Specific Investors will constitute a connected
transaction of the Company under Chapter 14A of the Hong Kong Listing Rules.
The Company shall comply with relevant regulatory rules, as well as the
respective transaction approval and disclosure procedures.
(4) Issue Price and The pricing benchmark date (the "Pricing Benchmark Date") for the Issuance of
A Shares to Specific Investors shall be the date on which the resolution(s) of
pricing method: the ninth meeting of the seventh session of the Board was announced, being 30
October 2025.
The price for the Issuance of A Shares to Specific Investors is RMB6.57 per
Share, which is not lower than the higher of 80% of the average trading price
of A Shares over the 20 Trading Days prior to the Pricing Benchmark Date (Note
1) and the Company's audited net assets per share attributable to ordinary
shareholders of the parent company (Note 2) as at the end of the most recent
period (calculation is rounded to two decimal places according to the "round
up method").
Notes:
1. The average trading price of A Shares over the 20 Trading Days
prior to the Pricing Benchmark Date = the total trading value of A Shares over
the 20 Trading Days prior to the Pricing Benchmark Date ÷ the total trading
volume of A Shares over the 20 Trading Days prior to the Pricing Benchmark
Date.
2. The net assets per share attributable to ordinary shareholders
of the parent company = total equity attributable to the shareholders of the
parent company÷ number of total issued ordinary shares of the Company.
The above pricing principle of the Issue Price was determined mainly based on
the requirements of the Administrative Measures.
For illustrative purpose, the Issue Price (i.e. RMB6.57 per Share) represents:
(i) a discount of approximately 23.16% to the closing price of A Shares (i.e.
RMB8.55 per A Share) as at the date of the Board meeting (i.e. 30 October
2025);
(ii) a discount of approximately 19.93% compared to 80% of the average trading
price of A Shares over the 20 Trading Days immediately prior to the Pricing
Benchmark Date (i.e. approximately RMB8.20 per A Share);
(iii) a premium of approximately 153.92% over the audited net assets per share
attributable to ordinary shareholders of the parent company as at 31 December
2024 (i.e. approximately RMB2.59 as prepared in accordance with the PRC
Accounting Standards for Business Enterprises).
The net price to be received by the Company for each new A Share to be issued
will be determined and disclosed in accordance with the requirements of the
Hong Kong Listing Rules upon completion of the Issuance of A Shares to
Specific Investors and after the relevant expenses incurred or to be incurred
in relation to the Issuance of A Shares to Specific Investors have been
ascertained.
In the event that the Company distributes dividend, issues bonus shares,
converts capital reserve into share capital or carries out any other ex-right
or ex-dividend
activities between the announcement date of the Board resolution for the
Issuance and the issuance date, the Issue Price will be adjusted accordingly.
The adjustment formula is as follows:
1. when only cash dividend is paid: P1=P0-D
2. when only bonus shares are issued or capital reserve is converted into
share capital: P1=P0/(1+N)
3. when the above two items are carried out simultaneously:
P1=(P0-D)/(1+N)
whereas P0 represents the Issue Price before adjustment, N represents the
number of bonus shares or capital reserve conversion per share, D represents
dividend per share and P1 represents the adjusted Issue Price.
The Issuance does not result in a theoretical dilution effect (as defined
under Rule 7.27B of the Hong Kong Listing Rules) and cumulative theoretical
dilution effect (when aggregated with the 2024 Issuance of A Shares) of 25% or
more.
(5) Number of issuance: The number of Shares to be issued under the Issuance of
A Shares to Specific Investors shall be no more than 3,044,140,030
(inclusive), which shall not exceed 30% of the total share capital of the
Company prior to the Issuance.
In the event that the Company distributes dividend, issues bonus shares,
converts capital reserve into share capital or carries out any other ex-right
or ex-dividend activities leading to changes in the Issue Price between the
announcement date of the Board resolution for the Issuance of A Shares and the
issuance date, the number of Shares to be issued under the Issuance of A
Shares to Specific Investors will be adjusted accordingly. The number of A
Shares to be issued to the specific investors shall be subject to the final
consent of the CSRC for registration.
If the proposed amount of proceeds or the number of shares to be issued under
the Issuance is adjusted due to changes in regulatory policies or due to
requirements of the issuance review or registration documents, the number of
shares to be issued under the Issuance shall be adjusted accordingly. In such
cases, the Board is authorized by the Shareholders' meeting to determine the
final number of shares to be issued in consultation with the sponsor (the lead
underwriter) based on the actual circumstances.
The Company will announce such adjustment to the number of new A Shares to be
issued under the Issuance of A Shares to Specific Investors in a timely
manner, and will continue to strictly maintain the minimum public float in
compliance with the Hong Kong Listing Rules and the consent granted by the
Hong Kong Stock Exchange (being 24.20%).
(6) Lock-up arrangement: Upon the completion of the Issuance of Shares to Specific
Investors, the shares acquired by the subscribers, CNAHC and CNAC Holding,
through the Issuance shall not be transferred for a period of 18 months from
the date of completion of the Issuance of Shares to Specific Investors. Any
shares derived by the subscribers from the Issuance of Shares to Specific
Investors through stock dividends distributed by the Company, capitalization
of capital reserves or similar circumstances shall also be subject to the
aforementioned lock-up arrangement. If the regulatory authorities governing
the Issuance of Shares to Specific Investors impose additional requirements
regarding the lock-up period for shares subscribed by the subscribers or the
transfer of shares upon expiration of the lock-up period, the aforementioned
lock-up period shall be adjusted accordingly in accordance with the policies
of the securities regulatory authorities.
Upon the expiration of the lock-up period, the subscribers shall comply with
the relevant provisions of laws, regulations, rules, normative documents
including the Company Law, the Securities Law, the Shanghai Listing Rules, and
the Articles of Association when reducing their holdings of shares obtained
through the Issuance of Shares to Specific Investors.
(7) Listing venue: The A Shares to be issued to the specific investors will be listed and traded
on the main board of the SSE upon expiration of the lock-up period.
(8) Arrangement relating to the accumulated undistributed profits prior to the The accumulated undistributed profits of the Company prior to the Issuance of
Issuance: A Shares to Specific Investors shall be shared by both new and existing
shareholders on a pro-rata basis according to their respective shareholdings
upon completion of the Issuance of A Shares to Specific Investors.
(9) Amount and use of proceeds: Gross proceeds to be raised from the Issuance of A Shares to Specific
Investors will be not more than RMB20.00 billion (inclusive), all the net
proceeds of which will be used for debt repayment and working capital
replenishment after deducting the relevant issuance expenses.
(10) Validity period of the resolution on the Issuance: The resolution on the Issuance of A Shares to Specific Investors shall remain
in full force and effect for a period of 12 months from the date on which the
issuance proposal for the Issuance of Shares to Specific Investors is approved
at the shareholders' meeting of the Company. If the national laws,
administrative regulations, departmental rules or normative documents provide
new requirements on the issuance of shares to specific investors, the Company
will adjust accordingly in accordance with the new requirements.
2.2 The Subscription Agreement
Principal terms of the Subscription Agreement are set out as below:
(1) Parties: (i) The Company (as the issuer); and
(ii) CNAHC (as the subscriber); and
(iii) CNAC Holding (as the subscriber).
(2) Date: 30 October 2025
(3) Subscription Price: CNAHC and CNAC Holding shall subscribe for new A
Shares at the Issue Price (i.e. RMB6.57 per Share).
In the event that the Company distributes dividend, issues bonus shares,
converts capital reserve into share capital or carries out any other ex-right
or ex-dividend activities between the announcement date of the Board
resolution(s) of the Company for the Issuance and the issuance date, the Issue
Price will be adjusted accordingly. The adjustment formula is as follows:
1. when only cash dividend is paid, adjusted according to the following
formula: P1=P0-D
2. when only bonus shares are issued or capital reserve is converted into
share capital, adjusted according to the following formula: P1=P0/(1+N)
3. when the above two items are carried out simultaneously, adjusted according
to the following formula: P1=(P0-D)/(1+N)
whereas P0 represents the Issue Price before adjustment, N represents the
number of bonus shares or capital reserve conversion per share, D represents
dividend per share and P1 represents the adjusted Issue Price.
(4) Subscription number and amount: The number of A Shares to be issued under the Issuance is not more than
3,044,140,030 shares (inclusive), which shall not exceed 30% of the total
share capital of the Company prior to the Issuance. In the event that the
Company distributes dividend, issues bonus shares, converts capital reserve
into share capital or carries out any other ex-right or ex-dividend activities
leading to changes in the Issue Price between the announcement date of the
Board resolution(s) for the Issuance and the issuance date, the number of A
Shares to be issued under the Issuance will be adjusted accordingly. The
number of A Shares to be issued under the Issuance is subject to the final
consent of the CSRC for registration.
If the proposed amount of proceeds or the number of shares to be issued under
the Issuance is adjusted due to changes in regulatory policies or due to
requirements of the issuance review or registration documents, the number of
shares to be issued under the Issuance shall be adjusted accordingly. In such
cases, the Board is authorized by the Shareholders' meeting to determine the
final number of shares to be issued in consultation with the sponsor (the lead
underwriter) based on the actual circumstances.
CNAHC and CNAC Holding will subscribe for all A Shares to be issued by the
Company under the Issuance, with a subscription amount equal to the gross
proceeds of the Issuance, which shall not be more than RMB20.00 billion
(inclusive). Among which, CNAHC subscribes for no less than 761,035,008 A
Shares (inclusive) under the Issuance, corresponding to a subscription amount
of no less than RMB5.00 billion (inclusive), and CNAC Holding subscribes for
no more than 2,283,105,022 A Shares (inclusive) under the Issuance,
corresponding to a subscription amount of no more than RMB15.00 billion
(inclusive). The final number of A Shares and the corresponding subscription
amounts for each of CNAHC and CNAC Holding will be determined separately
through consultation with the sponsor (the lead underwriter) of the Issuance.
(5) Payment method and arrangements for accumulated undistributed profits: (i) Upon satisfaction of all conditions precedent under the Subscription
Agreement and following receipt of the Company's payment notice, CNAHC and
CNAC Holding shall, in accordance with the requirements specified in the
payment notice (including the payment deadline and other matters), remit the
full subscription amount in a single cash payment to the designated bank
account specifically established by the sponsor (the lead underwriter) for the
Issuance of A Shares to Specific Investors. Such payment shall be made within
five business days upon receipt of the payment notice. Upon completion of
capital verification and deduction of related expenses, the proceeds shall be
transferred to the Company's designated deposit account for proceeds of the
Issuance.
(ii) The accumulated undistributed profits of the Company prior to the
Issuance shall be shared by both new and existing shareholders on a pro- rata
basis according to their respective shareholdings upon completion of the
Issuance.
(6) Registration for issuing the subscribed shares and lock-up: (i) Within 15 business days from the date the Company receives the
subscription amount for the Issuance from CNAHC and CNAC Holding, the Company
shall engage an accounting firm with securities-related practice
qualifications to conduct a capital verification, and promptly complete the
registration procedures for the relevant industrial and commercial changes as
well as the share registration procedures with China Securities Depository and
Clearing Corporation Limited, thereby enabling CNAHC and CNAC Holding to
become the legal holders of the subscribed shares.
(ii) From the date of registration of the subscribed shares, CNAHC and CNAC
Holding shall legally own the subscribed shares and enjoy the corresponding
shareholders' rights.
(iii) CNAHC and CNAC Holding undertake that, Shares obtained by CNAHC and CNAC
Holding through the Issuance will not be transferred in any manner within 18
months from the completion date of the Issuance (the "Lock-up Period"). If the
CSRC and the exchange(s) on which Shares of the Company are listed have
differing provisions, CNAHC and CNAC Holding agree to make adjustments based
on the Company's actual circumstances, provided such adjustments comply with
the relevant regulations.
Any additional Shares of the Company subscribed by CNAHC and CNAC Holding
resulting from the Company's issuance of bonus shares or conversion of capital
reserve into share capital after completion of the Issuance shall also be
subject to the aforementioned Lock-up Period arrangements. Following the
expiration of the Lock-up Period, the relevant Shares shall remain subject to
rules of regulatory authorities including the CSRC and the Shanghai Stock
Exchange.
(7) Conditions precedent for the Subscription Agreement: The parties agreed and confirmed that, unless all parties otherwise consent in
writing to a waiver, and if such waiver is permitted under applicable laws and
regulations, the Subscription Agreement will be established upon signing and
affixing of seals by the legal representative or authorized representative of
the parties and take effect when all the following conditions are satisfied:
(i) matters relating to the Issuance having been approved by the Board and
the Shareholders' meeting of the Company;
(ii) matters relating to subscribing the shares to be issued under the
Issuance having been approved by the internal decision-making body(ies) of
CNAHC and CNAC Holding;
(iii) matters relating to the Issuance having been approved by the body
performing the duty of supervision and administration of state-owned assets;
(iv) matters relating to the Issuance having been considered and approved by
the Shanghai Stock Exchange; and
(v) the registration of the Issuance having been consented to by the CSRC.
The effective date of the Subscription Agreement shall be the date on which
all the above conditions precedent are satisfied or waived.
In the event that the Issuance of A Shares to Specific Investors fails to
obtain the necessary consent, approval or registration from shareholders'
meeting of the Company, the regulatory department for state-owned assets or
its authorized body, the Shanghai Stock Exchange and the CSRC according to the
laws, the Subscription Agreement shall be automatically terminated and both
parties shall not be liable to each other for breach of contract.
As at the date of this announcement, matters relating to the Issuance of A
Shares to Specific Investors are still subject to the approval from the body
performing the functions of supervision and administration of state-owned
assets, the consideration and approval at the EGM of the Company, the review
and approval by the Shanghai Stock Exchange and the registration with the
CSRC, and may be implemented after obtaining the consent of the CSRC for
registration. Following the receipt of the CSRC's consent for registration,
the Company will apply to the Shanghai Stock Exchange and Shanghai Branch of
China Securities Depository and Clearing Corporation Limited for handling the
share issuance, registration and listing in accordance with the laws.
3. DILUTIVE EFFECTS OF THE ISSUANCE OF A SHARES TO SPECIFIC INVESTORS ON THE SHAREHOLDING STRUCTURE OF THE COMPANY
For illustration purpose only, set out below is the dilutive effects of the
Issuance of A Shares to Specific Investors on the shareholding structure of
the Company, assuming that (i) the size of proceeds raised from the Issuance
of A Shares to Specific Investors is no more than RMB20.00 billion based on
the issuance of 3,044,140,030 new A Shares at the Issue Price (i.e. RMB6.57
per Share), among which, 761,035,008 shares will be subscribed for by CNAHC
and 2,283,105,022 shares will be subscribed for by CNAC Holding; and (ii) no
additional Shares will be issued by the Company after the date of this
announcement until the completion of the Issuance of A Shares to Specific
Investors:
The above 3,044,140,030 new A Shares represent: (i) 24.37% and 17.45% of the
Company's existing issued A Shares and total issued Shares as at the date of
this announcement, respectively; and (ii) 19.59% and 14.85% of the Company's
enlarged issued A Shares and enlarged total issued Shares upon completion of
the Issuance of A Shares to Specific Investors as above, respectively.
As at the date of this announcement Immediately upon completion of the Issuance of
A Shares to Specific Investors
Total number of Shares held Approximate percentage of the total number of Shares in issue Total number of Shares held Approximate percentage of the total number of Shares in issue
Shareholders
1. CNAHC and its associates: 9,370,724,929 53.71% 12,414,864,959 60.58%
(i) CNAHC 7,421,462,701 42.53% 8,182,497,709 39.93%
(A Shares)
(ii) CNACG 1,949,262,228 11.18% 1,949,262,228 9.51%
(i) 1,332,482,920 7.64% (i) 1,332,482,920 6.50%
(A Shares) (A Shares)
(ii) 616,779,308 3.54% (ii) 616,779,308 3.01%
(H Shares) (H Shares)
(iii) CNAC Holding - - 2,283,105,022 11.14%
(A Shares）
As at the date of this announcement Immediately upon completion of the Issuance of
A Shares to Specific Investors
Total number of Shares held Approximate percentage of the total number of Shares in issue Total number of Shares held Approximate percentage of the total number of Shares in issue
Shareholders
2. Cathay Pacific 2,633,725,455 15.09% 2,633,725,455 12.85%
(H Shares) (H Shares)
3. Public Shareholders: 5,443,970,616 31.20% 5,443,970,616 26.57%
(i) Public A Shareholders 3,738,864,707 21.43% 3,738,864,707 18.24%
(ii) Public H Shareholders 1,705,105,909 9.77% 1,705,105,909 8.32%
Sub-total (H Shares): 4,955,610,672 28.40% 4,955,610,672 24.18%
Sub-total (A Shares): 12,492,810,328 71.60% 15,536,950,358 75.82%
Total: 17,448,421,000 100.00% 20,492,561,030 100.00%
Notes:
1. The percentages shown are rounded to the nearest two decimal
places. The percentage figures listed in the table above may not add up to
100% due to rounding.
2. Upon completion of the Issuance of A Shares to Specific
Investors, the Company continues to comply with the minimum public float as
required by the Hong Kong Listing Rules and agreed by the Hong Kong Stock
Exchange (being 24.20%).
4. PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION
Upon completion of the Issuance of A Shares to Specific Investors, there will
be changes in, among others, the registered share capital and total number of
shares of the Company, and accordingly, the provisions of the Articles of
Association relating to the registered share capital, total number of shares,
etc. of the Company will be amended to reflect such changes. The Board
proposed to the Shareholders to authorize the Board and its authorized
person(s) to make corresponding amendments to the relevant provisions in the
Articles of Association in accordance with the results of the Issuance of A
Shares to Specific Investors at the EGM.
5. HONG KONG LISTING RULES IMPLICATIONS
The new A Shares under the Issuance of A Shares to Specific Investors will be
issued pursuant to the specific mandates to be sought from the Shareholders at
the EGM. The Issuance of A Shares to Specific Investors is conditional upon,
among others, the approval of the relevant resolutions at the EGM.
Since CNAHC is the controlling shareholder of the Company and CNAC Holding is
a wholly owned subsidiary of CNAHC, CNAHC and CNAC Holding are connected
persons of the Company, and the Issuance of A Shares to Specific Investors
constitutes a connected transaction of the Company under Chapter 14A of the
Hong Kong Listing Rules and is subject to the announcement, reporting and
independent shareholders' approval requirements.
The Independent Board Committee comprising all the independent non-executive
Directors has been formed to advise the Independent Shareholders on the
Issuance of A Shares to Specific Investors. BaoQiao Partners has been
appointed as the Independent Financial Adviser to advise the Independent Board
Committee and the Independent Shareholders on the Issuance of A Shares to
Specific Investors.
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 a material interest in the Issuance of A Shares to Specific
Investors and therefore have abstained from voting on the following Board
resolutions: (1) the resolution in relation to the proposal of the Issuance of
A Shares to Specific Investors by the Company in 2025; (2) the resolution in
relation to the preliminary proposal of the Issuance of A Shares to Specific
Investors by the Company in 2025; (3) the resolution in relation to the
discussion and analysis report on the proposal of the Issuance of A Shares to
Specific Investors by the Company in 2025; (4) the resolution in relation to
the feasibility analysis report on the use of proceeds from the Issuance of A
Shares to Specific Investors by the Company in 2025; (5) the resolution in
relation to the related (connected) transaction concerning the entering into
of the conditional A Share subscription agreement with specific investors by
the Company; and (6) the resolution in relation to the authorization by the
Shareholders' meeting to the Board and its authorized person(s) to proceed
with relevant matters in respect of the Issuance of Shares to Specific
Investors by the Company in their sole discretion.
Save as mentioned above, none of other Directors has a material interest in
the Issuance of A Shares to Specific Investors and is required to abstain from
voting on the relevant Board resolutions.
6. REASONS FOR AND BENEFIT OF THE ISSUANCE OF A SHARES TO SPECIFIC INVESTORS
After taking into consideration of the following factors, the Board considers
that it is fair and reasonable and in the interests of the Company and
Shareholders as a whole to raise funds by the Issuance of A Shares to Specific
Investors.
(I) Enhancing Air Transportation Service Capabilities to Support the
National Development Strategy
As a core central state-owned enterprise, the Company undertakes the mission
of building a national flagship carrier, supporting the implementation of
major decisions of the Central Committee of the Communist Party of China, and
facilitating key national strategies. Strengthening the Company's overall
capabilities is of strategic importance for the Company to seize industry
development opportunities, better serve national strategies, and actively
adapt to the rapidly changing market environment. As of 30 June 2025, the
Company operated a total fleet of 934 aircraft, with continuous optimization
of its fleet structure. The Company maintains an extensive and balanced global
and domestic route network, a high-value customer base and strong brand
influence. The Issuance will significantly improve the Company's
asset-liability structure, further enhance overall fleet operational
efficiency and safety, optimize the route network layout, strengthen coverage
supporting major national regional development strategies and markets along
the Belt and Road initiative, and consolidate the Company's core competitive
advantages in the air transport sector.
(II) Optimizing Asset-Liability Structure to Enhance Development
Quality
The aviation industry is notably capital-intensive, and maintaining a sound
capital structure is essential for the Company's long-term and stable
development. In recent years, the Company's capital structure has been under
significant pressure. At the end of 2022, 2023, 2024 and September 2025, the
Company's gearing ratios were 92.69%, 89.48%, 88.16% and 87.88%, respectively,
remaining at relatively high levels. The proceeds from the Issuance will be
used for debt repayment and working capital replenishment, which will help the
Company in controlling interest-bearing debt levels, optimizing its asset-
liability structure and enhancing financial stability. At the same time, it
will strengthen the Company's capital base, secure funding for business
development needs, enhance profitability and risk resilience, and provide
strong support for the Company's high- quality development.
(III) Full Subscription by Controlling Shareholder and its
Associate Demonstrates Development Confidence
As a core central state-owned enterprise in the aviation sector, the Company
places great importance on high-quality development and strives to enhance
operational efficiency and profitability, promoting the continuous growth in
investment value of the Company.
The Issuance will be fully subscribed by the controlling shareholder, CNAHC,
and its controlled subsidiary, CNAC Holding, as the subscribers. This will
further increase shareholdings of the controlling shareholder in the Company,
support the Company's high-quality development, demonstrate their firm
confidence in the Company's future prospects, and convey recognition of the
Company's value, and help boost market confidence while safeguarding the
interests of the Company's minority Shareholders.
The Directors (including the independent non-executive Directors) are of the
opinion that although the Issuance of A Shares to Specific Investors is not in
the ordinary and usual course of business of the Group, the terms of the
Subscription Agreement entered into by the Company pursuant to the proposal of
the Issuance of A Shares to Specific Investors are fair and reasonable and the
transaction contemplated thereunder is conducted on normal commercial terms or
better and in the interests of the Company and Shareholders as a whole.
7. FUND-RAISING ACTIVITIES IN THE PAST TWELVE MONTHS
On 10 December 2024, the Company issued 854,700,854 A Shares to CNAHC at the
issue price of RMB7.02 per share (the "2024 Issuance of A Shares"), raising
gross proceeds of RMB5,999,999,995.08 and the net proceeds of
RMB5,995,841,631.45. The aforementioned proceeds were intended to be used for
the introduction of 17 aircraft and replenishing working capital of the
Company. As of 30 September 2025, RMB5,973,146,757.25 has been utilized in
accordance with the prescribed purposes, with a remaining balance of
RMB29,910,724.79 in the fundraising account. The Company will continue to
utilize the remaining proceeds in accordance with the prescribed purposes. For
details, please refer to the announcements of the Company dated 22 December
2023, 26 January 2024, 21 October 2024, 12 November 2024 and 12 December 2025
and the circular of the Company dated 9 January 2024.
Save as disclosed above, the Company has not conducted any equity fund-raising
activities during the twelve months immediately before the date of this
announcement.
8. GENERAL INFORMATION OF THE PARTIES
The Company
The Company is principally engaged in providing air passenger, air cargo and
related services.
CNAHC
As at the date of this announcement, CNAHC directly holds 42.53% of the
Company's shares and holds 11.18% of the Company's shares through its
wholly-owned subsidiary CNACG, 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.
CNAC Holding
As at the date of this announcement, CNAC Holding is a wholly owned subsidiary
of CNAHC. CNAC Holding is a limited liability company established in the PRC
whose principal businesses include financing and capital raising, asset and
investment management, centralized treasury management and value-added
financial services.
9. THE EGM
The EGM will be convened by the Company for the Shareholders to consider and,
if thought fit, approve the relevant resolutions in respect of, among other
things, the Issuance of A Shares to Specific Investors.
A circular containing, among others, details of the Issuance of A Shares to
Specific Investors together with a notice convening the EGM will be published
on or before 31 December 2025, to allow sufficient time for the preparation of
the relevant information for the inclusion in the circular.
The Company advises the Shareholders and potential investors to note that the
Issuance of A Shares to Specific Investors is subject to the satisfaction of
certain conditions, and therefore the Issuance of A Shares to Specific
Investors may or may not proceed. Accordingly, they are advised to exercise
caution when dealing in the securities of the Company.
DEFINITIONS
In this announcement, unless the context otherwise requires, the following
expressions have the following meanings:
"Administrative Measures" the Administrative Measures for the Issuance and Registration of Securities by
Listed Companies 《( 上市公司證券發行註冊管理辦法》) issued by
CSRC (the China Securities Regulatory
Commission Decree, No. 206)
"Articles of Association" the articles of association of the Company
"A Share(s)" the ordinary shares issued by the Company, with a par value of RMB1.00 each,
which are listed on the Shanghai Stock Exchange
"A Shareholders" holders of A Shares
"associate(s)" has the meaning ascribed to it under the Hong Kong Listing Rules
"Board" the board of Directors of the Company
"Cathay Pacific" Cathay Pacific Airways Limited
"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
"CNAC Holding" China National Aviation Capital Holding Co., Ltd., a wholly- owned subsidiary
of CNAHC
"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
"EGM" the extraordinary shareholders' meeting of the Company to be convened for the
Shareholders to consider and, if thought fit, approve the resolutions in
respect of, among other things, the Issuance
"Group" the Company and its subsidiaries from time to time
"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
"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
"Independent Board Committee" a board committee comprising Mr. Xu Niansha, Mr. He Yun, Ms. Winnie Tam
Wan-chi and Mr. Gao Chunlei, all being the independent non-executive Directors
"Independent Financial Adviser" or "BaoQiao Partners" BaoQiao Partners Capital Limited, a corporation licensed to carry out Type 6
(advising on corporate finance) regulated activity under the SFO, being the
independent financial adviser to the Independent Board Committee and the
Independent Shareholders to advise on the Issuance of A Shares to Specific
Investors
"Independent Shareholders" the shareholders of the Company, other than CNAHC and its associates
"Issuance of A Shares to Specific Investors", "Issuance of Shares The Company's issuance of A Shares to CNAHC and CNAC Holding through issuance
of shares to specific investors
to Specific Investors", "Issuance of A Shares" or "the Issuance"
"Issue Price" the issue price of the Issuance, being RMB6.57 per Share
"RMB" Renminbi, the lawful currency of the PRC
"SASAC of the State Council" the State Asset Supervision and Administration Commission of the State Council
of the PRC
"Shanghai Listing Rules" the Rules Governing the Listing of Stocks on the Shanghai Stock Exchange
"SSE" or "Shanghai Stock Exchange" the Shanghai Stock Exchange
"Share(s)" shares of the Company
"Shareholder(s)" holder(s) of the shares of the Company
"Subscription Agreement" the conditional A share subscription agreement dated 30 October 2025 entered
into among the Company, CNAHC and CNAC Holding in respect of the Issuance of A
Shares to Specific Investors, pursuant to which, the Company agreed to issue,
and CNAHC and CNAC Holding agreed to subscribe for new A Shares in the amount
of not more than RMB20.00 billion at the Issue Price
"substantial shareholder(s)" has the meaning ascribed thereto under the Hong Kong Listing Rules
"Trading Day" a day on which the Shanghai Stock Exchange is open for dealing or trading in
securities
"%" 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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