Approval of A Share Issue

31 Jul 2006 07:00

Air China Ld31 July 2006 The Stock Exchange of Hong Kong Limited takes no responsibility for thecontents of this announcement, makes no representation as to its accuracy orcompleteness and expressly disclaims any liability whatsoever for any losswhatsoever arising from or in reliance upon the whole or any part of thecontents of this announcement. AIR CHINA LIMITED (a joint stock limited company incorporated in the People's Republic of China with limited liability) (Stock Code: 753) (1) CSRC Approval of A Share Issue (2) Commencement of Price Consultation for A Share Issue SUMMARY The CSRC has on 28 July 2006 approved the application of the Company toproceed with the A Share Issue. The A Share Issue will comprise theallotment and issue of not more than 2.7 billion A Shares. As required by the relevant PRC regulations, the Sponsors for the A ShareIssue will conduct preliminary price consultation among 67 institutionsrecognized by the Securities Association of China from 31July 2006 to 2 August 2006 in the PRC. The A Share Prospectus will be published on the website of the ShanghaiStock Exchange on 31 July2006 and a summary of the A Share Prospectus willbe published in several PRC newspapers on the same day. Reference is made to the announcement of the Company dated 24 July 2006 inrespect of the Company's proposed A Share Issue. The CSRC has on 28 July 2006 approved the application of the Company toproceed with the A Share Issue. The A Share Issue will comprise theallotment and issue of not more than 2.7 billion A Shares to institutionaland public investors in the PRC. As required by the relevant PRC regulations, the Sponsors for the A ShareIssue will conduct preliminary price consultation among the 67 institutionsrecognized by the Securities Association of China from 31 July 2006 to 2August 2006 in the PRC. The Company and the Sponsors will determine theexact number of A Shares to be issued and the offer price in accordance withindicative demand for the A Shares and the Company's funding needs. TheCompany will issue an announcement once the final A Share Issue size and theoffer price have been determined. CNAHC, the controlling shareholder of the Company, has undertaken that uponthe listing and trading of A Shares that were issued and subscribed by cashat a fixed price online on Shanghai Stock Exchange and up to 31 December 2006, CNAHC will, subject to the market price of A Shares falling below the issue price, increase its shareholding by acquiring shares through the secondary market at a price not lower than the then market price of A Shares in accordance with relevant regulatory requirements so as to restore the price of A Shares to the issue price and the accumulated increase in shareholding of CNAHC will not exceed 600 million A Shares. The A Share Prospectus will be published on the website of the ShanghaiStock Exchange (http:// www.sse.com.cn) on 31 July 2006 and a summary of theA Share Prospectus will be published in several PRC newspapers including theChina Securities Journal, Shanghai Securities News and Securities Times andSecurities Daily on the same day. DEFINITIONS In this announcement, unless the context otherwise requires, the followingterms shall have the following meanings: "A Shares" the Domestic Shares which are proposed to be allotted and issued by the Company to qualified institutional investors as approved by CSRC and investors including domestic individuals, legal persons and etc. who have opened accounts at the Shanghai Stock Exchange (except those prohibited from subscribing for the shares by the applicable laws and regulations at the time of the A Shares Issue) and listed on the Shanghai Stock Exchange "A Share the proposed issue of not more than 2.7 billion A SharesIssue" by Company to qualified institutional investors as approved by CSRC and investors including domestic individuals, legal persons and etc. who have opened accounts at the Shanghai Stock Exchange (except those prohibited from subscribing for the shares by the applicable laws and regulations at the time of the A Shares Issue), which are proposed to be listed on the Shanghai Stock Exchange "A Share the prospectus to be issued by the Company in relation to the Prospectus" A Share Issue "CNAHC" China National Aviation Holding Company, a company incorporated under the laws of the People's Republic of China which currently directly owns approximately 51.16% of the Company's share capital as at the date of this announcement "Company" Air China Limited, a company incorporated in the People's Republic of China with primary listing on The Stock Exchange of Hong Kong Limited and secondary listing on the Official List of the UK Listing Authority "CSRC" China Securities Regulatory Commission "Director(s)" the director(s) of the Company "Sponsors" CITIC Securities Company Limited, China Galaxy Securities Company Limited, China International Capital Corporation Limited "PRC" the People's Republic of China, excluding, for the purpose of this circular only, Hong Kong, Macau and Taiwan "RMB" Renminbi, the lawful currency of the PRC By order of the Board Air China Limited Zheng Baoan Li Man Kit Joint Company Secretaries Beijing, 31 July 2006 As at the date of this announcement, the Directors of the Company are MessrsLi Jiaxiang, Kong Dong, Wang Shixiang, Yao Weiting, Christopher Dale Pratt,Ma Xulun, Cai Jianjiang, Fan Cheng, Hu Hung Lick, Henry*, Wu Zhipan*, ZhangKe* and Jia Kang*. * Independent non-executive Director of the Company "Please also refer to the published version of this announcement in theSouth China Morning Post" This information is provided by RNS The company news service from the London Stock Exchange