Airlines Co Ltd announced that it has signed a Sales & Purchase
Agreement with Southern Airlines Group for the acquisition of
certain aircraft and aircraft related assets from the SA Group.
acquisition is a connected transaction and subject to independent
shareholders' approval at the Extraordinary General Meeting of
CSA. The assets comprise five Boeing 737-300 aircraft, the associated
spare parts and 42 special purpose vehicles in connection with
the ground support of the Aircraft.
Chairman, Yan Zhiqing, said, "We believe the acquisition
will be beneficial because the ownership of the assets will allow
the company to further integrate the aircraft into its dominant
market position in the domestic aviation business. The acquisition
with the consolidation strategy that the company has adopted in
light of the proposed restructuring of the aviation industry in
the acquisition is in line with the non-competition undertaking
granted by the SA Group to the Company when the Company was listed
on the Stock Exchange in 1997.
value of the assets is over RMB1bn, which is based on the appraised
value of the assets and liabilities as at June 30, 2001 prepared
by Zhongfeng Asset Valuation LLC, an independent auditor approved
by the Ministry of Finance in the PRC.
will be satisfied with cash payment of RMB132,150,139.47 and the
assumption of related debt amounting to RMB964,735,967.24 by the
company. Completion of the acquisition is expected to take place
in first quarter 2002.
also intends to apply to the relevant PRC authorities for the
issue of new A Shares to institutional and public investors in
the PRC and the listing of and permission to deal with such A
Shares on the Shanghai Stock Exchange.
will seek approval from shareholders of the company to authorize
the application for the proposed A Share Issue at the EGM, which
will be held on March 26, 2002.
also proposed to change the composition of the Board of Directors,
which is required by the CSRC in order to further enhance the
corporate governance of the Company during its restructuring process.
J P Morgan
Securities (Asia Pacific) Ltd is the financial adviser to CSA.
An Extraordinary General Meeting will be held for CSA shareholders
to approve the proposed Acquisition, the proposed A Share Issue,
and the proposed change in composition of the Board of Directors