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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.
(formerly known as CATIC Shenzhen Holdings Limited (深圳中航集團股份有限公司) )
(a joint stock company incorporated in the People’s Republic of China with limited liability)
(Stock Code: 00161)
CONNECTED TRANSACTION
ESTABLISHMENT OF A JOINT VENTURE COMPANY
THE CAPITAL CONTRIBUTION AGREEMENT
The Board is pleased to announce that the Company has entered into the Capital
Contribution Agreement with AVIC Aircraft, Shanxi Aircraft, AVIC Electromechanical
Systems, AVIC ADE and AVIC Avionics, on 11 November 2014 for the establishment
of the JV Company to engage in the design, testing, manufacture and sales of airplane
(including aerocrafts) and other related businesses, technology services, and import and
export businesses, etc.
IMPLICATIONS UNDER THE LISTING RULES
As AVIC Aircraft, AVIC Electromechanical Systems and AVIC Avionics are associates
of Aviation Industry, each of AVIC Aircraft, AVIC Electromechanical Systems
and AVIC Avionics is a connected person of the Company. AVIC International is a
controlling shareholder of the Company, and AVIC ADE is a wholly owned subsidiary
of AVIC International, hence AVIC ADE is also a connected person of the Company.
The transactions contemplated under the Capital Contribution Agreement constitute a
connected transaction of the Company under Chapter 14A of the Listing Rules.
As the applicable percentage ratios (as defined under the Listing Rules) are more than 0.1%
but less than 5%, the Capital Contribution Agreement is subject to, among other things,
the reporting and announcement requirements under Chapter 14A of the Listing Rules but
exempt from independent shareholders’ approval requirement.
INTRODUCTION
On 11 November 2014, the Company has entered into the Capital Contribution Agreement
with AVIC Aircraft, Shanxi Aircraft, AVIC Electromechanical Systems, AVIC ADE and
AVIC Avionics, pursuant to which the JV Partners agreed to establish the JV Company with a
total registered capital of RMB1.9 billion (equivalent to approximately HK$2.375 billion).
–1–
THE CAPITAL CONTRIBUTION AGREEMENT
Principal terms of the Capital Contribution Agreement are summarized as follows:
Date:
11 November 2014
Parties:
(1)
the Company;
(2)
AVIC Aircraft;
(3)
Shanxi Aircraft;
(4)
AVIC Electromechanical Systems;
(5)
AVIC ADE; and
(6)
AVIC Avionics.
Each of AVIC Aircraft, AVIC Electromechanical Systems, AVIC ADE and AVIC Avionics is
a connected person of the Company.
To the best of the Directors’ knowledge, information and belief having made all reasonable
enquiries, Shanxi Aircraft and its respective ultimate beneficial owner(s) are Independent
Third Parties.
Purpose and Business Scope of the JV Company
The JV Company will engage in the design, testing, manufacture and sales of airplane
(including aerocrafts) and other related businesses, technology services, and import and export
businesses, etc.
Conditions of the Capital Contribution Agreement
AVIC Aircraft shall pay for the preliminary expenses for the establishment of the JV
Company on behalf of the other JV Partners. If the Capital Contribution Agreement becomes
effective and the JV Company is duly established, the preliminary expenses incurred by AVIC
Aircraft shall be borne by the JV Company. If the JV Company cannot be established, each
of the JV Partners shall bear the preliminary expenses corresponds to their respective capital
commitment of the JV Company.
The Capital Contribution Agreement shall become effective upon:
(1)
each of the JV Partners has undergone the required internal procedures in respect of the
Capital Contribution Agreement; and
(2)
execution of the Capital Contribution Agreement by all the JV Partners.
The Company shall obtain independent shareholders’ approval in respect of the Capital
Contribution Agreement and the transactions contemplated thereunder in accordance with the
Listing Rules, if such approval is required.
–2–
Registered Capital
The JV Company shall have a registered capital of RMB1.9 billion. The amount of registered
capital to be contributed by the JV Partners corresponds to their respective equity interest in
the JV Company, details of which are set out as follows:
(1)
AVIC Aircraft shall contribute RMB700 million in cash and shall hold 36.84% equity
interest in the JV Company;
(2)
Shanxi Aircraft shall contribute RMB600 million in cash and shall hold 31.58% equity
interest in the JV Company;
(3)
AVIC Electromechanical Systems shall contribute RMB200 million in cash and shall
hold 10.53% equity interest in the JV Company;
(4)
The Company shall contribute RMB150 million in cash and shall hold 7.895% equity
interest in the JV Company;
(5)
AVIC ADE shall contribute RMB150 million in cash and shall hold 7.895% equity
interest in the JV Company; and
(6)
AVIC Avionics shall contribute RMB100 million in cash and shall hold 5.26% equity
interest in the JV Company.
All the above contribution to the registered capital of the JV Company shall be fully paid
by cash in stages within 12 months from the date of establishment of the JV Company. The
capital contribution shall be made in two phases as follows:
(a)
First Phase: The first phase shall be made within 30 days from the date of establishment
of the JV Company in accordance with the Capital Contribution Agreement as follows:
AVIC Aircraft
RMB100 million (equivalent to approximately
HK$125 million) in cash
Shanxi Aircraft
RMB300 million (equivalent to approximately
HK$375 million) in cash
AVIC Electromechanical Systems
RMB100 million (equivalent to approximately
HK$125 million) in cash
The Company
RMB150 million (equivalent to approximately
HK$187.5 million) in cash
AVIC Avionics
RMB50 million (equivalent to approximately
HK$62.5 million) in cash
Total
RMB700 million (equivalent to approximately
HK$875 million)
–3–
(b)
Second Phase: The second phase shall be made within 12 months from the date
of establishment of the JV Company in accordance with the Capital Contribution
Agreement as follows:
AVIC Aircraft
RMB600 million (equivalent to approximately
HK$750 million) in cash
Shanxi Aircraft
RMB300 million (equivalent to approximately
HK$375 million) in cash
AVIC Electromechanical Systems
RMB100 million (equivalent to approximately
HK$125 million) in cash
AVIC ADE
RMB150 million (equivalent to approximately
HK$187.5 million) in cash
AVIC Avionics
RMB50 million (equivalent to approximately
HK$62.5 million) in cash
Total
RMB1,200 million (equivalent to approximately
HK$1,500 million)
The amount of capital contribution under the Capital Contribution Agreement was arrived at
arm’s length negotiation among the JV Partners.
The Company intends to fund its capital contribution under the Capital Contribution
Agreement by internal financial resources.
Profit Sharing
Subject to the Capital Contribution Agreement, the JV Partners shall share the profits and bear
the risk in proportion to their equity interests in the JV Company.
Share Transfer
Pursuant to the Capital Contribution Agreement, unless with the unanimous consent of all the
JV Partners, within ten years of the establishment of the JV Company, none of the JV Partners
shall transfer all or part of its equity interest in the JV Company to any third party other than
the JV Partners. Each of the JV Partners shall have the right to transfer all or part of its equity
interest in the JV Company to the other JV Partners. None of the JV Partners shall transfer all
or part of their equity interest to a third party who is, directly or indirectly, competes with the
business activities of the JV Company.
If any of the JV Partners proposes to transfer all or part of their equity interest in the JV
Company to a third party other than the JV Partners, consent from more than half of the other
JV Partners shall be obtained, and on the same conditions, the other JV Partners shall have the
pre-emptive right in purchasing such equity interest.
–4–
Composition of the board of directors of the JV Company
The board of directors of the JV Company shall comprise nine directors, with four directors
to be nominated by AVIC Aircraft, two directors to be nominated by Shanxi Aircraft, one
director to be nominated by AVIC Electromechanical Systems, one director to be nominated
by the Company and one director to be nominated by the employees of the JV Company.
The chairman of the board of directors of the JV Company shall be nominated by AVIC
Aircraft and to be elected by all the directors of the JV Company.
Composition of the senior management of the JV Company
The JV Company shall have one general manager to be proposed by AVIC Aircraft, and
appointed by the board of directors; and several deputy general managers, to be nominated by
the general manager and appointed by the board of directors.
Composition of the supervisory committee of the JV Company
The supervisory committee of the JV Company shall comprise three members with one
member to be nominated by Shanxi Aircraft, one member to be nominated by AVIC Avionics
and one member to be nominated by the employees of the JV Company.
The chairman of the supervisory committee of the JV Company shall be nominated by Shanxi
Aircraft and to be elected at a supervisory committee meeting.
REASONS FOR AND BENEFITS OF THE ESTABLISHMENT OF THE JV COMPANY
The investment to establish the JV Company is on one hand in line with the national trend for
civil aircraft and navigation business development through the establishment of professional
development platform with civil aircraft and navigation business nature and gradually tapping
into the aviation industry; and on the other hand, it can effectively create internal corporate
synergies among companies under Aviation Industry by rationally utilizing their respective
resource advantages and hence improving the Company’s income.
In light of the above, the Directors (including the independent non-executive Directors) are of
the view that the terms of the Capital Contribution Agreement are fair and reasonable and on
normal commercial terms and the entering into of the Capital Contribution Agreement and the
transaction contemplated thereunder are in the interests of the Company and the Shareholders
as a whole.
Information of the Group
The Group is principally engaged in the business of high-tech electronic products, retails and
high-end customer products, real estate and hotel, trading and logistics, resource investment
and development.
Information of AVIC Aircraft
AVIC Aircraft is a joint stock limited liability company established in the PRC. It is
principally engaged in the design, manufacture, maintenance, modification, sales and services
–5–
of aircraft and aviation spare parts. AVIC Aircraft is an associate of Aviation Industry, and a
connected person of the Company for the purpose of Chapter 14A of the Listing Rules. As at
the date of this announcement, Aviation Industry owns, directly or indirectly, more than 50%
interests in AVIC Aircraft.
As at the date of this announcement, Aviation Industry holds 62.52% of the equity interest in
AVIC International. AVIC International is a controlling shareholder of the Company holding
approximately 39.37% of the issued share capital of the Company, and it owns 100% equity
interest in AVIC Shenzhen, which in turn is a controlling shareholder of the Company holding
approximately 35.63% of the issued share capital of the Company.
Information of Shanxi Aircraft
Shanxi Aircraft is a state-owned limited liability company established in the PRC. It
is principally engaged in the investment (limited to self-owned capital), development,
administration and management in aviation industry and related areas.
Information of AVIC Electromechanical Systems
AVIC Electromechanical Systems is principally engaged in the investment and management
of the research and development, manufacture and sales of various aerocrafts and related
aviation electrical products. AVIC Electromechanical Systems is a wholly owned subsidiary
of Aviation Industry, and a connected person of the Company for the purpose of Chapter 14A
of the Listing Rules.
Information of AVIC ADE
AVIC ADE is principally engaged in the transportation tools of aviation manufacturing and
the export business of machineries; and import of transportation tools and machineries. As
at the date of this announcement, AVIC ADE is wholly owned by AVIC International, and a
connected person of the Company for the purpose of Chapter 14A of the Listing Rules.
Information of AVIC Avionics
AVIC Avionics is principally engaged in the research and development, manufacture, and
sales of various aerocrafts and related aviation electrical products. As at the date of this
announcement, AVIC Avionics is a wholly owned subsidiary of Aviation Industry, and a
connected person of the Company for the purpose of Chapter 14A of the Listing Rules.
Information of the JV Company
The JV Company is proposed to be established in the PRC for the purpose of engaging in
the design, testing, manufacture and sales of airplane (including aerocrafts) and other related
businesses, technology services, and import and export businesses, etc. After its establishment,
the JV Company is to be owned as to 36.84%, 31.58%, 10.53%, 7.895%, 7.895% and 5.26%
by AVIC Aircraft, Shanxi Aircraft, AVIC Electromechanical Systems, the Company, AVIC
ADE and AVIC Avionics, respectively. As the Company will own 7.895% equity interest
in the JV Company after its establishment, the JV Company will not be accounted for a
subsidiary of the Company.
–6–
IMPLICATIONS UNDER THE LISTING RULES
As each of AVIC Aircraft, AVIC Electromechanical Systems, AVIC ADE and AVIC Avionics
is a connected person of the Company for the purpose of Chapter 14A of the Listing Rules,
the Capital Contribution Agreement constitutes a connected transaction of the Company under
Chapter 14A of the Listing Rules.
As the applicable percentage ratios (as defined under the Listing Rules) are more than 0.1%
but less than 5%, the Capital Contribution Agreement is subject to, among other things, the
reporting and announcement requirements under Chapter 14A of the Listing Rules but exempt
from independent shareholders’ approval requirement.
None of the Directors has material interest in the Capital Contribution Agreement or is
required to abstain from voting on the Board resolutions in relation to the approval of the
Capital Contribution Agreement.
Each of the JV Partners shall also execute the articles of association of the JV Company in
connection with the establishment of the JV Company.
DEFINITIONS
In this announcement, the following expressions have the meanings set out below unless the
context requires otherwise:
“associate(s)”
has the meaning ascribed to it under the Listing Rules
“Aviation Industry”
Aviation Industry Corporation of China (中國航空工業集團
公司), an enterprise owned by the whole people (全民所有
制企業) established in the PRC and directly holds 62.52% of
the equity interest in AVIC International
“AVIC ADE”
AVIC International Aero-Development Corporation Limited
(中航國際航空發展有限公司), a limited liability company
established in the PRC, and one of the JV Partners
“AVIC Aircraft”
AVIC Aircraft Company Limited (中航飛機股份有限公司),
a limited liability company established in the PRC, the A
shares of which are listed on the Shenzhen Stock Exchange
and one of the JV Partners
“AVIC Avionics”
AVIC Avionics Systems Company Limited (中航航空電子
系統有限責任公司), a limited liability company established
in the PRC, and one of the JV Partners
“AVIC Electromechanical
Systems”
AVIC Electromechanical Systems Company Limited (中航
機電系統有限公司), a limited liability company established
in the PRC, and one of the JV Partners
–7–
“AVIC International”
AVIC International Holding Corporation (中國航空技術國
際控股有限公司), a limited liability company established in
the PRC, a controlling shareholder of the Company
“AVIC Shenzhen”
AVIC International Shenzhen Company Limited (中國航空
技術深圳有限公司), a limited liability company established
in the PRC, a controlling shareholder of the Company, and as
at the date of this announcement, its entire equity interest is
owned by AVIC International
“Board”
the board of Directors
“Capital Contribution
Agreement”
the capital contribution agreement in relation to the JV
Company dated 11 November 2014 entered into among the
JV Partners regarding the establishment of the JV Company
“Company”
AVIC International Holdings Limited (中航國際控股股份
有限公司) (formerly known as CATIC Shenzhen Holdings
Limited (深圳中航集團股份有限公司)), a joint stock limited
company incorporated in the PRC with limited liability,
whose H Shares are listed on the Stock Exchange
“connected person(s)”
has the meaning ascribed thereto under the Listing Rules
“Director(s)”
the director(s) of the Company
“Group”
the Company and its subsidiaries
“HK$”
Hong Kong dollar(s), the lawful currency of Hong Kong
“Hong Kong”
the Hong Kong Special Administrative Region of the PRC
“Independent Third Party(ies)”
any person or company and their respective ultimate
beneficial owner(s) which are third parties independent of
the Company and its connected persons (as defined under the
Listing Rules)
“JV Company”
a limited liability company, proposed to be named as 中航
飛機西安民機有限責任公司 (AVIC Aircraft Xian Civil
Aircraft Co. Ltd) to be established in the PRC pursuant to
the Capital Contribution Agreement
“JV Partners”
AVIC Aircraft, Shanxi Aircraft, AVIC Electromechanical
Systems, AVIC ADE, AVIC Avionics and the Company
“Listing Rules”
the Rules Governing the Listing of Securities on the Stock
Exchange
–8–
“percentage ratios”
has the meaning ascribed to such term under the Listing
Rules
“PRC”
The People’s Republic of China
“RMB”
Renminbi, the lawful currency of the PRC
“Shanxi Aircraft”
Shanxi Aircraft Property Development Group Co., Ltd (陝
西航空產業發展集團有限公司), a limited liability company
established in the PRC and one of the JV Partners
“Share(s)”
share(s) of the Company
“Shareholder(s)”
holder(s) of shares (including domestic shares and H shares)
of the Company
“Stock Exchange”
The Stock Exchange of Hong Kong Limited
“%”
per cent.
In this announcement, the English names of the PRC entities are translation of their
Chinese names, and are included herein for identification purpose only. In the event of any
inconsistency, the Chinese names shall prevail.
By order of the Board
AVIC International Holdings Limited
Wu Guang Quan
Chairman
Shenzhen, PRC, 11 November 2014
As at the date of this announcement, the Board comprises a total of 9 Directors, Mr. Wu
Guang Quan, Mr. You Lei, Mr. Lai Wei Xuan, Mr. Pan Lin Wu, Mr. Chen Hong Liang and Mr.
Liu Jun as executive Directors; and Ms. Wong Wai Ling, Mr. Wu Wei and Mr. Zhang Ping as
independent non-executive Directors.
Unless otherwise specified in this announcement, amounts denominated in RMB have been
converted into Hong Kong dollars at HK$1.00 to RMB$0.80 for illustration purpose only. No
representation has been made by the Company that any amount have been, could have been or
could be converted at the above rate or at any other rates or at all.
–9–