UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
6-K
Report
of Foreign Private Issuer
Pursuant
to Rule 13a-16 or 15d-16
under
the Securities Exchange Act of 1934
For
the
month of September 2007.
Commission
File Number: 001-14550
China
Eastern Airlines Corporation Limited
(Translation
of Registrant’s name into English)
2550
Hongqiao Road
Hongqiao
Airport
Shanghai,
China 200335
(Address
of principal executive offices)
Indicate
by check mark whether the registrant files or will file annual reports under
cover of Form 20-F or Form 40-F: x Form 20-F
o
Form 40-F
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted
by Regulation S-T Rule 101(b)(1): o
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted
by Regulation S-T Rule 101(b)(7): o
Indicate
by check mark whether the registrant by furnishing the information contained
in
this Form is also thereby furnishing the information to the Commission pursuant
to Rule 12g3-2(b) under the Securities Exchange Act of 1934: o Yes x No
If
"Yes"
is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): n/a
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
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China
Eastern Airlines Corporation Limited
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| (Registrant) | ||
| |
|
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| Date September 4, 2007 | By | /s/ Li Fenghua |
|
Name: Li Fenghua
Title: Chairman of the Board of
Directors
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Certain
statements contained in this announcement may be regarded as "forward-looking
statements" within the meaning of the U.S. Securities Exchange Act of 1934,
as
amended. Such forward-looking statements involve known and unknown risks,
uncertainties and other factors, which may cause the actual performance,
financial condition or results of operations of the Company to be materially
different from any future performance, financial condition or results of
operations implied by such forward-looking statements. Further information
regarding these risks, uncertainties and other factors is included in the
Company's filings with the U.S. Securities and Exchange Commission. The
forward-looking statements included in this announcement represent the Company's
views as of the date of this announcement. While the Company anticipates
that
subsequent events and developments may cause the Company's views to change,
the
Company specifically disclaims any obligation to update these forward-looking
statements, unless required by applicable laws. These forward-looking statements
should not be relied upon as representing the Company's views as of any date
subsequent to the date of this announcement.
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.
(A
joint stock limited company incorporated in the People's Republic of China
with
limited liability)
(Stock
code: 670)
(1)
COMMERCIAL CONSENSUS ON STRATEGIC INVESTMENT IN
CHINA
EASTERN AIRLINES CORPORATION LIMITED
(2)
RESUMPTION OF TRADING IN SHARES
CEA
and
CEA Holding have reached commercial consensus with SIA and Temasek regarding
the
basis on which SIA and Temasek will proceed with a proposed strategic investment
in CEA by way of subscription for new H Shares in CEA. In connection with
the
proposed strategic investment, CEA Holding will also subscribe for new
H Shares
in CEA. The commercial consensus is reflected in a heads of agreement entered
into by CEA, CEA Holding, SIA and Temasek on 2 September 2007. The Heads
of
Agreement is not legally binding and is subject to definitive transaction
agreements to be discussed and entered into between relevant
parties.
Investors
should note that the detailed terms regarding the Proposed Share Subscriptions
and the proposed strategic cooperation have yet to be finalized and agreed
on.
Further, even if and when the detailed terms have been agreed on, completion
of
the Proposed Share Subscriptions and the proposed strategic cooperation
will be
subject to the obtaining of all applicable government approvals, regulatory
approvals and shareholders approvals and other conditions precedent.
Accordingly, there is uncertainty as to whether the Proposed Share Subscriptions
and the proposed strategic cooperation will indeed materialize. Investors
are
advised to exercise caution when dealing in the shares of
CEA.
Further
announcements will be made by CEA if and when the detailed terms of the
Proposed
Share Subscriptions and the proposed strategic cooperation have been agreed
on
and definitive legally binding agreements have been signed.
At
the
request of CEA, trading in the H Shares of CEA on the Stock Exchange was
suspended with effect from 9:47 a.m. on 22 May 2007. CEA has made an application
to the Stock Exchange for the resumption of trading in its shares on the
Stock
Exchange with effect from 9:30 a.m. on 3 September 2007.
1
CEA
and
CEA Holding have reached commercial consensus with SIA and Temasek regarding
the
basis on which SIA and Temasek will proceed with a proposed strategic investment
in CEA by way of subscription for new H Shares in CEA. In connection with
the
proposed strategic investment, CEA Holding will also subscribe for new H
Shares
in CEA. The commercial consensus is reflected in a heads of agreement entered
into by CEA, CEA Holding, SIA and Temasek on 2 September 2007. The Heads
of
Agreement is not legally binding and is subject to definitive transaction
agreements to be discussed and entered into. The commercial consensus reached
is
as follows:
| I. |
THE
PROPOSED SHARE
SUBSCRIPTIONS
|
SIA
and
Temasek will, at the subscription price of HK$ 3.80 per share, subscribe
in cash
for 1,235,005,263 new H Shares and 649,426,737 new H Shares in CEA respectively.
Immediately after completion of the Proposed Share Subscriptions, SIA and
Temasek will hold new H Shares in CEA representing approximately 15.7% and
8.3%
of the total enlarged share capital of CEA respectively.
In
connection with the share subscriptions by SIA and Temasek, CEA Holding will,
at
the subscription price of HK$3.80 per share, subscribe in cash for 1,100,418,000
new H Shares in CEA. Immediately after completion of the Proposed Share
Subscriptions, CEA Holding will hold new H Shares which together with the
A
Shares it already holds will represent in aggregate approximately 51% of
the
total enlarged share capital of CEA.
The
subscription price of HK$3.80 per share represents a premium of 1.9% as compared
to the closing price on 21 May 2007. The new H Shares subscribed for by each
of
SIA, Temasek and CEA Holding represent respectively 25.4%, 13.3% and 22.6%
of
the current total issued share capital of CEA. Completion of the share
subscription by each of SIA, Temasek and CEA Holding is inter-conditional
and
will take place simultaneously. The board of directors of CEA does not currently
have any general mandate (granted by shareholders) to issue new shares. Thus,
it
is anticipated that specific shareholders approvals will have to be obtained
by
CEA for the issue of the new H Shares under the Proposed Share
Subscriptions.
The
new H
Shares issued to SIA, Temasek and CEA Holding pursuant to the Proposed Share
Subscriptions will not be transferred within three years after the date of
completion of the Proposed Share Subscriptions. However, during the three-year
period, Temasek may, if permitted by applicable laws and regulations, transfer
its H Shares to SIA.
Shareholding
structure of CEA immediately prior to
completion
of the Proposed Share Subscriptions
2
Shareholding
structure of CEA immediately after completion
of
the Proposed Share Subscriptions
Shareholding
structure of CEA
in
terms of numbers of shares
|
CEA
Holding
(A
Shares)
|
CEA
Holding
(H
Shares)
|
SIA
(H
Shares)
|
Temasek
(H
Shares)
|
Public
(A
Shares)
|
Public
(H
Shares)
|
||||||||||||||
|
Current
shareholding
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2,904,000,000
|
0
|
0
|
0
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396,000,000
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1,566,950,000
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|||||||||||||
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%
of total shares outstanding
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59.7
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%
|
0
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%
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0
|
%
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0
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%
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8.1
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%
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32.2
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%
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|||||||
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Number
of new H shares issued
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0
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1,100,418,000
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1,235,005,263
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649,426,737
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0
|
0
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|||||||||||||
|
Post-subscription
shareholding
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2,904,000,000
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1,100,418,000
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1,235,005,263
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649,426,737
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396,000,000
|
1,566,950,000
|
|||||||||||||
|
%
of total shares
outstanding
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37.0
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%
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14.0
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%
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15.7
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%
|
8.3
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%
|
5.0
|
%
|
20.0
|
%
|
|||||||
| II. |
AGREEMENTS
CONTEMPLATED AND KEY
TERMS
|
CEA,
SIA
and Temasek will endeavour to agree on the detailed terms of the share
subscription agreement(s) within two months after the date of the Heads of
Agreements. Such period may be extended by agreement of the parties. At the
same
time when CEA, SIA and Temasek enter into the share subscription agreement(s),
CEA Holding will enter into a share subscription agreement with CEA. It is
also
expected that CEA Holding, SIA and Temasek will enter into a shareholders
agreement which sets forth the key terms and conditions of strategic partnership
between CEA Holding, SIA and Temasek with respect to CEA. CEA and SIA will
also
enter into (1) a cooperation agreement which sets forth the key areas of
strategic alliance and cooperation between CEA and SIA, and (2) a personnel
secondment agreement.
Completion
of the share subscriptions by SIA and Temasek are expected to be subject
to a
number of conditions precedent including the obtaining of all applicable
government approvals, regulatory approvals and shareholders
approvals.
3
The
shareholders agreement, or where appropriate the share subscription
agreement(s), are expected to contain the following key terms:
|
·
|
Board
representation
|
SIA
will
have the right to nominate two persons as directors of CEA. Such number of
persons will change proportionally if the shareholding of SIA in CEA changes.
Temasek will have the right to nominate one person as a director of CEA so
long
as Temasek holds not less than 5% of the total registered share capital of
CEA.
|
·
|
Executive
appointments
|
Each
of
SIA and CEA Holding will have the right to nominate personnel for certain
executive positions at CEA. In addition, SIA will have consent right to the
nomination of key executive positions of CEA.
|
·
|
Key
strategic and financial
decisions
|
Minority
shareholder protection mechanism for SIA in respect of certain major corporate
actions of CEA will be established.
|
·
|
Alliance
|
Whether
or not CEA joins a global alliance that competes with the global alliance
that
SIA is in will be discussed and jointly decided by CEA and SIA.
|
·
|
Competition
|
CEA
and
CEA Holding undertake not to issue or sell their shares to SIA's competitors.
SIA undertakes that, from the date of the share subscription agreement and
as
long as the cooperation agreement between CEA and SIA has not been terminated,
SIA will not make any new investments in another PRC-based airline company
which
by itself or through its subsidiaries holds an Air Operator's Certificate
issued
by the PRC government, where SIA does not already have any
interest.
|
·
|
Finance
committee
|
If
permitted by applicable laws and listing rules, a finance committee comprising
members from SIA, CEA and other persons elected by the board of directors
of CEA
will be established by the board of directors of CEA.
|
·
|
Anti-dilution
|
If
permitted by applicable laws and regulatory authorities, CEA and CEA Holding
will grant SIA the right to subscribe for new shares in proportion to SIA's
shareholding in the event of a private or public placement of CEA
shares.
|
·
|
Increase
in shareholding percentage
|
SIA
will
have the right to increase its shareholding percentage when PRC foreign
ownership restriction laws are relaxed.
4
|
·
|
Right
to first refusal over CEA
shares
|
If
permitted by applicable laws and regulatory authorities, SIA will have the
right
of first refusal over any CEA shares to be sold by CEA Holding. CEA Holding
will
have the right of first refusal over any CEA shares to be sold by
SIA.
As
regards the term about "Anti-dilution" above, CEA will endeavour to ensure
CEA's
compliance with applicable listing rules at the time of further subscriptions
by
SIA for new CEA shares, and CEA will seek to make this point clear in the
definitive legally binding agreements to be entered into.
Investors
should note that the detailed terms regarding the Proposed Share Subscriptions
and the proposed strategic cooperation (which are to be reflected in share
subscription agreements, a shareholders agreement, a cooperation agreement
and a
personnel secondment agreement) have yet to be finalized and agreed on. Further,
even if and when the detailed terms have been agreed on, completion of the
Proposed Share Subscriptions and the proposed strategic cooperation will
be
subject to the obtaining of all applicable government approvals, regulatory
approvals and shareholders approvals and other conditions precedent.
Accordingly, there is uncertainty as to whether the Proposed Share Subscriptions
and the proposed strategic cooperation will indeed materialize. Investors
are
advised to exercise caution when dealing in the shares of
CEA.
Further
announcements will be made by CEA if and when the detailed terms of the Proposed
Share Subscriptions and the proposed strategic cooperation have been agreed
on
and definitive legally binding agreements have been signed.
At
the
request of CEA, trading in the H Shares of CEA on the Stock Exchange was
suspended with effect from 9:47 a.m. on 22 May 2007. CEA has made an application
to the Stock Exchange for the resumption of trading in its shares on the
Stock
Exchange with effect from 9:30 a.m. on 3 September 2007.
In
relation to the proposed strategic investment in CEA, Goldman Sachs (Asia)
L.L.C. has been appointed by CEA as its financial adviser, and UBS AG, acting
through its business group, UBS Investment Bank, has been appointed by SIA
as
its financial adviser.
DEFINITIONS
In
this
announcement, unless the context otherwise requires, the following expressions
have the following meanings:
| "A Shares" | means the ordinary shares issued by CEA, with a Renminbi-denominated par value of RMB1.00 each, which are subscribed for and paid up in Renminbi and are listed on the Shanghai Stock Exchange; | |
| "CEA" | means 中國東方航空股份有限公司 (China Eastern Airlines Corporation Limited), a joint stock limited company incorporated in the PRC with limited liability, whose H Shares, A shares and American depositary shares are listed on the Stock Exchange, the Shanghai Stock Exchange and the New York Stock Exchange, Inc., respectively; |
5
| "CEA Holding" | means 中國東方航空集團公司 (China Eastern Air Holding Company), a wholly PRC state-owned enterprise and the controlling shareholder of CEA holding approximately 59.7% of its issued share capital; | |
| "H Shares" | means the ordinary shares issued by CEA, with a Renminbi-denominated par value of RMB1.00 each, which are subscribed for and paid up in a currency other than Renminbi and are listed on the Stock Exchange; | |
| "Heads of Agreement" | means a non legally-binding heads of agreement dated 2 September 2007 among CEA, CEA Holding, SIA and Temasek, containing the commercial consensus of the parties regarding, among other things, the basis on which SIA, Temasek and CEA Holding will proceed with the Proposed Share Subscriptions and the finalization of the agreements described in this announcement; | |
| "Proposed Share Subscriptions" | means (1) the proposed subscriptions for new H Shares in CEA by SIA and Temasek in the proposed strategic investment in CEA, and (2) in connection with such investment, the proposed subscription for new H Shares in CEA by CEA Holding; | |
| "SIA" | means Singapore Airlines Limited, a company incorporated in the Republic of Singapore, whose shares are listed on the Singapore Stock Exchange; | |
| "Stock Exchange" | means The Stock Exchange of Hong Kong Limited; and | |
| "Temasek" | means Lentor Investments Pte. Ltd., an indirect, wholly owned subsidiary of Temasek Holdings (Private) Limited. | |
|
By
order of the board of directors
CHINA
EASTERN AIRLINES CORPORATION LIMITED
Li
Fenghua
Chairman
|
As
at
the date of this announcement, the directors of CEA are:
| Li Fenghua | (Chairman, Non-executive Director) | |
| Li Jun | (Vice Chairman, Non-executive Director) | |
| Luo Chaogeng | (Non-executive Director) | |
| Cao Jianxiong | (President, Executive Director) | |
| Luo Zhuping | (Executive Director) | |
| Hu Honggao | (Independent non-executive Director) | |
| Peter Lok | (Independent non-executive Director) | |
| Wu Baiwang | (Independent non-executive Director) | |
| Zhou Ruijin | (Independent non-executive Director) | |
| Xie Rong | (Independent non-executive Director) |
Shanghai,
the PRC
2
September 2007
6