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 March 2010
Commission
File Number: 001-14550
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China
Eastern Airlines Corporation Limited
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(Translation
of Registrant’s name into
English)
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2550
Hongqiao Road
Hongqiao
Airport
Shanghai,
China 200335
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(Address
of principal executive
offices)
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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 |
March
24, 2010
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By:
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/s/ Luo Zhuping | ||
| Name: Luo Zhuping | |||||
| Title: Director and Company Secretary | |||||
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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.
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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.
(a joint stock limited company incorporated in the People’s Republic of China with limited liability)
(Stock code: 00670)
CONTINUING CONNECTED TRANSACTION
EXCLUSIVE OPERATION OF MEDIA RESOURCES
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On
24 March 2010, the Company and the Advertising Company entered into the
Agreement, under which, the Company agreed to grant the Advertising
Company exclusive rights to operate the media resources of the
Company.
The
Advertising Company is interested as to 55% by, and thus an associate of,
中國東方
航空集團公司(China
Eastern Air Holding Company), which is a substantial shareholder of the
Company. As such, the Advertising Company is a connected person of the
Company and the Transaction constitutes a continuing connected transaction
of the Company under the Listing Rules.
As
the relevant applicable percentage ratios set out in the Listing Rules in
respect of the Transaction is expected to be less than 2.5% on an annual
basis, the Transaction is only subject to the reporting and announcement
requirements and is exempted from the approval of the independent
shareholders of the Company pursuant to the Listing
Rules.
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THE
AGREEMENT
On 24
March 2010, the Company and the Advertising Company entered into the Agreement,
pursuant to which, the Company agreed to grant the Advertising Company exclusive
rights to operate the media resources of the Company.
Pursuant
to the Agreement, the Advertising Company will have the following exclusive
rights:
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(i)
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to
distribute the in-flight reading materials to the customers of the
Company;
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(ii)
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to
operate the advertisement in the media resources of the Company, which
includes the folding tables, occipital plate to the seat, in-flight radios
and video entertainment programmes, advertisement system on airport
shuttles, website and mobile connection (mobile phones);
and
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(iii)
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to
be commissioned to purchase in-flight entertainment programmes (which may
include the content of the advertisements) from independent third parties
or produce such programmes on its
own.
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- 1 -
For other
exploitable media resources that are not included in the preceding paragraphs,
the Company has the right to invite public bidding. The Advertising Company has
the priority to develop and operate the aforementioned exploitable media
resources if in the bidding process the Advertising Company offers the same
terms as the other bidders.
Consideration
The
operation fees payable by the Advertising Company to the Company for the
Transaction increase by 7.5% annually, which are RMB12.00 million, RMB12.90
million and RMB13.87 million for 2010, 2011 and 2012 respectively. The annual
operation fees are payable into the bank account as designated by the Company in
two equal instalments, first instalments will be paid by 31 January and the
second instalments will be paid by 31 July.
In
addition, as referred to in the 2008 CCT Announcement, the Advertising Company
will from time to time provide the Group with multi-media advertising services
to promote its business and to organise promotional functions and campaigns to
enhance its reputation in the civil aviation industry. Pursuant to the
Agreement, in relation to the advertising design and the image promotion of the
Company which will be advertised on the media resources, the Advertising Company
has agreed to provide the Company the advertisement position or time interval
with a value of approximately RMB30 million every year. If such fees exceed
RMB30 million, the Company shall pay the excess of such amount to the
Advertising Company. As mentioned in the 2008 CCT Announcement, the operation
fees payable to the Advertising Company for its services provided shall be based
on prevailing market rates available from independent third-party service
providers under comparable conditions. Such operation fees shall be determined
based on arm’s length negotiations, and shall be no less favourable than those
offered by the Advertising Company to independent third parties. The Company
expects that the annual caps of the service fees payable by the Company to the
Advertising Company as stated in the 2008 CCT Announcement will remain
unchanged.
Terms
The term
of the Agreement is 3 years commencing from 24 March 2010 to 31 December
2012. The
parties may extend the terms upon mutual agreement in writing pursuant to the
Agreement,
and the term of extension will be 3 years.
Termination
The
Agreement will be terminated upon, inter alia, the occurrence of the following
events:
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(i)
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the
term of the Agreement expires;
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(ii)
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the
parties enter into a termination agreement;
or
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(iii)
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the
Agreement is terminated according to the laws, regulations or judgments or
decisions of court or arbitral award of arbitral
tribunal.
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- 2 -
Reasons
for and benefits of the Transaction
The
Advertising Company has been engaged in the professional aviation media business
for a long time and has the relevant experience in aviation media business. In
addition, the Advertising Company, being a company having established a long
term cooperation relationship with the Group in the operation of media
resources, has a better understanding of the corporate culture and the brand of
the Group. The Directors believe that through the Transaction, the development
and utilization of the media resources of the Company will be more
professional.
Annual
caps
The Group
aims to continuously enhance its service quality and with additional aircraft
coming into operation, the scale of the fleet of the Group will expand. As a
result, there will be more media resources available which will lead to a
corresponding increase in the operation fees payable by the Advertising Company
to the Company. The operation fees for the media resources are determined based
on the scope and depth of the development of the media resources, and the
estimated annual caps are based on the assumption that the operation fees will
increase as a result of the development and expansion of the scope of the media
resources.
The
annual operation fees payable by the Advertising Company to the Company for the
three financial years ending 31 December 2010, 2011 and 2012 are not expected to
exceed RMB30 million, RMB40 million and RMB50 million respectively.
IMPLICATION
UNDER THE LISTING RULES
The
Advertising Company is interested as to 55% by, and thus an associate of, 中國東方航 空集團公司 (China
Eastern Air Holding Company), which is a substantial shareholder of the Company.
As such, the Advertising Company is a connected person of the Company and the
Transaction constitutes a continuing connected transaction of the Company under
the Listing Rules.
As the
relevant applicable percentage ratios set out in the Listing Rules in respect of
the Transaction is expected to be less than 2.5% on an annual basis, the
Transaction falls within Rule 14A.34 of the Listing Rules and is subjected to
the reporting and announcement requirements only and is exempted from the
approval by the independent shareholders of the Company under the Listing
Rules.
Based on
the information described above and taken into consideration all matters as set
out in the Agreement and the transactions contemplated thereunder, the Directors
(including independent non-executive Directors) believe that the terms of the
Agreement are fair and reasonable and in the interests of the Company’s
shareholders as a whole.
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INFORMATION
OF THE PARTIES
The
Company is principally engaged in the business of civil aviation.
The
Advertising Company is principally engaged in business of multi-media
advertising operations, including advertising design and production, and
organising promotional functions and campaigns.
DEFINITIONS
In this
announcement, unless the context otherwise requires, the following expressions
have the following meanings:
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“2008
CCT Announcement”
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means
the announcement of the Company dated 29 April 2008 in relation to, inter
alia, the continuing connected transactions of the Company in relation to
the Advertising Services Renewal Agreement, pursuant to which the
Advertising Company will from time to time provide the Group with
multi-media advertising services to promote its business and to organise
promotional functions and campaigns to enhance its reputation in the civil
aviation industry;
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“Advertising
Company”
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means
東方航空傳媒有限公司
(Eastern Aviation Advertising Co, Ltd);
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“Advertising
Services Renewal
Agreement”
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means
the advertising services renewal agreement dated 29 April 2008 entered
into between the Advertising Company and the Company, pursuant to which
the Advertising Company will from time to time provide the Group with
multi-media advertising services to promote its business and to organise
promotional functions and campaigns to enhance its reputation in the civil
aviation industry (please refer the announcement of the Company dated 29
April 2008 for details);
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“Agreement”
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means
the agreement entered into between the Company and the Advertising Company
on 24 March 2010, under which, the Company agreed to grant the Advertising
Company exclusive rights to operate the media resources of the
Company;
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“Company”
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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 of Hong Kong Limited, the Shanghai Stock Exchange and the New
York Stock Exchange, Inc.,
respectively;
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“connected
person(s)”
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has
the meaning ascribed thereto under the Listing Rules;
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“Directors”
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means
the directors of the Company;
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“Group”
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means
the Company and its subsidiaries;
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“Listing
Rules”
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means
the Rules Governing the Listing of Securities on The Stock Exchange of
Hong Kong Limited;
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“PRC”
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means
the People’s Republic of China;
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“RMB”
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means
Renminbi yuan, the lawful currency of the PRC; and
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“Transaction”
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means
the exclusive rights to operate the media resources of the Company granted
to the Advertising Company by the Company pursuant to the
Agreement.
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By order of the board
of Directors
CHINA EASTERN AIRLINES CORPORATION LIMITED
Luo Zhuping
Director and Company Secretary
The Directors, as at th
e date of this announcement are:
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Liu
Shaoyong
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(Chairman)
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Li
Jun
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(Vice
Chairman)
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Ma
Xulun
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(Director,
President)
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Luo
Chaogeng
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(Director)
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| Luo Zhuping | (Director, Company Secretary) |
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Wu
Baiwang
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(Independent
Non-executive Director)
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Xie
Rong
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(Independent
Non-executive Director)
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Sandy
Ke-Yaw Liu
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(Independent
Non-executive Director)
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Wu
Xiaogen
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(Independent
Non-executive Director)
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Ji
Weidong
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(Independent
Non-executive Director)
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Shanghai, the PRC
24 March 2010
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