SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
6-K
Report
of Foreign Private Issuer
Pursuant
to Rule 13a-16 or 15d-16 of
the
Securities Exchange Act of 1934
August
21, 2007
CHINA
SOUTHERN AIRLINES COMPANY LIMITED
(Translation
of registrant's name into English)
Jichang
Road
Guangzhou,
Guangdong 510405
People’s
Republic of China
(Address
of principal executive offices)
(Indicate
by check mark whether the registrant files or will file annual reports under
cover Form 20-F or Form 40-F.)
Form
20-F. x
Form
40-F. 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.)
Yes
o
No.
x
(If
"Yes"
is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): 82-________.)
China
Southern Airlines Company Limited (the “Company”) published an announcement on
August 20, 2007 on the Hong Kong Stock Exchange’s website at http://main.ednews.hk/listedco/listconews/search/search_active_main.asp
that the
Company entered into an Aircraft Acquisition Agreement with the Boeing Company
on August 20, 2007 to acquire 55 Boeing B737 and B737-800 aircrafts. A copy
of
the English announcement is included in this Form 6-K of the
Company.
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.
CHINA
SOUTHERN AIRLINES COMPANY LIMITED
By:
/s/ Su
Liang
Name:
Su
Liang
Title:
Company Secretary
Date:
August 21, 2007
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: 1055)
VERY
SUBSTANTIAL ACQUISITION
|
The
Directors hereby announce that on 20 August 2007 (after trading
hours) the
Company entered into the Boeing Aircraft Acquisition Agreement
with Boeing
to purchase the Boeing Aircraft from Boeing.
The
Directors believe that the acquisitions of the Boeing Aircraft
is
beneficial to the implementation of the Company’s development strategy and
improvement of the Company’s operating capacity in order to accommodate
the continuous growth in demand for aviation services in the PRC.
It is
also believed that the Acquisition will facilitate the implementation
of
the Company’s plan to replace its old aircraft with new aircraft and
enhance the competitiveness and core competence of the Company.
Therefore,
the Directors, including the independent non-executive Directors,
believe
that the terms of the Boeing Aircraft Acquisition Agreement are
fair and
reasonable, are on normal commercial terms and in the interests
of the
Company and its shareholders as a whole.
Pursuant
to Rule 14.22 of the Listing Rules, the relevant applicable percentage
ratio for the Acquisition, aggregated with the Previous Boeing
Aircraft
Purchase with regards to the consideration test under Rule 14.07
of the
Listing Rules is above 100%, the Acquisition together with the
Previous
Boeing Aircraft Purchase together constitute a very substantial
acquisition of the Company, and therefore is subject to approval
by the
Company’s shareholders under Rule 14.49 of the Listing Rules. This
announcement is also made pursuant to Rule 13.09(1) of the Listing
Rules.
None
of the shareholders of the Company is required to abstain from
voting in
respect of the proposed resolutions to approve the Boeing Aircraft
Acquisition Agreement.
The
Acquisition is also required to be disclosed pursuant to the relevant
rules and regulations of the Shanghai Stock Exchange.
The
Company will send a circular containing the information required
under the
Listing Rules in relation to the Boeing Aircraft Acquisition Agreement
within 21 days after the publication of this
announcement.
|
1
The
Directors collectively and individually warrant that the information set out
in
this announcement does not contain any misrepresentation, misleading statement
or material omission and jointly and severally accept full responsibility as
to
the truthfulness, accuracy and completeness of the content herein.
The
Board
hereby announces that pursuant to the articles of association of the Company,
the Board considered and approved the following resolutions on 20 August 2007
(after trading hours):
| (a) |
the
Boeing Aircraft Acquisition Agreement entered into between the Company
and
Boeing, pursuant to which the Company would purchase the Boeing Aircraft
from Boeing; and
|
| (b) |
the
convening of general meeting of the shareholders to approve the Boeing
Aircraft Acquisition Agreement.
|
All
the
attending Directors participated in considering and approving the above
resolutions. The format and procedure for passing the resolutions were in
compliance with the Company Law of the PRC and the Company’s articles of
association.
On
20
August 2007 (after trading hours), the Company entered into the Boeing Aircraft
Acquisition Agreement, pursuant to which the Company agreed to purchase the
Boeing Aircraft from Boeing in accordance with the terms and conditions
thereof.
BOEING
AIRCRAFT ACQUISITION AGREEMENT
Date:
20
August
2007
Parties
| (i) |
The
Company, as the purchaser. The principal business activity of the
Company
is that of civil aviation.
|
| (ii) |
The
Boeing Company, a company incorporated in the State of Delaware of
the
United States of America, as the vendor. The principal business activity
of Boeing is that of aircraft manufacturing. To the best of the Directors’
knowledge, information and belief having made all reasonable enquiry,
each
of Boeing and its respective ultimate beneficial owners is a third
party
independent of the Company and connected persons (as defined in the
Listing Rules) of the Company, and is not a connected person of the
Company.
|
Aircraft
to be acquired
55
Boeing
B737-700 and B737-800 aircraft
2
Consideration
According
to the information provided by Boeing, the catalogue price of a Boeing B737-700
aircraft is in the range of US$57 - US$67.5 million and a Boeing B737-800
aircraft is in the range of US$70.5 - US$79 million. Such catalogue price
includes price for airframe and engine.
The
Boeing Aircraft Acquisition Agreement was negotiated and entered into in
accordance with the customary business and industry practice. The aggregate
actual consideration for the Boeing Aircraft, which is payable in cash, and
determined after arm’s length negotiation between the parties, is significantly
lower than the catalogue price as provided by Boeing because of certain price
concessions granted by Boeing in relation to the Boeing Aircraft, in the form
of
credit memoranda which could be used to purchase the aircraft, spare parts,
or
any other goods or services from Boeing. Such credit memoranda were determined
after arm’s length negotiation between the parties. The Board (including the
independent non-executive Directors) is of the view that there is no material
impact of the price concessions obtained in the Acquisition on the operating
costs of the Group.
In
respect of the Acquisition, the Boeing Aircraft Acquisition Agreement contains
confidentiality provisions restricting, among other things, disclosure of the
consideration of the Acquisition. In addition, consistent with the customary
practice of the local aviation industry, the consideration for the acquisition
of the Boeing Aircraft is not customarily disclosed to the public. The Company
has on separate occasions sought the consents of Boeing to the Company’s
disclosure of certain information as required under Chapter 14 of the Listing
Rules, (including the relevant actual consideration involved) in the relevant
announcements and circulars. Nonetheless, Boeing rejected the Company’s request
in this respect, and insisted preservation of the confidentiality carried with
such information to the extent possible. Disclosure of the actual consideration
will result in the loss of the significant price concessions and hence a
significant negative impact on the Group’s cost for the Acquisition and will
therefore not be in the interest of the Company and its shareholders as a whole.
The Company has made an application to the Stock Exchange for a waiver from
strict compliance with the relevant provisions under the Listing Rules in
respect of the disclosure of the actual consideration for the Boeing
Aircraft.
The
Board
is of the view that the extent of the price concessions granted to the Company
in the Acquisition is comparable with the price concessions that the Group
had
obtained in the Previous Boeing Aircraft Acquisition Agreements. The Company
also believes that there is no material difference between the effect of the
price concessions obtained in the Acquisition and each of the Previous Boeing
Aircraft Acquisition Agreements on the Group’s operating costs taken as a
whole.
Payment
and delivery terms
The
aggregate consideration for the acquisition of the Boeing Aircraft will be
partly payable by cash of the Company, and partly by financing arrangements
with
banking institutions. Further information in respect of the payment terms will
be disclosed in the circular containing the information required under the
Listing Rules in relation to the Acquisition to be circulated within 21 days
after the publication of this announcement. The Boeing Aircraft will be
delivered in stages to the Company during the period commencing from May 2011
to
October 2013.
3
Source
of funding
The
Acquisition will be funded partly by internal resources of the Company and
partly through commercial loans by commercial banks. Such commercial banks
are
not and will not be connected persons (as defined in the Listing Rules) of
the
Company. As of the date hereof, the Company has not entered into any agreement
with any of these commercial banks for financing the Acquisition. The Company
will follow the necessary legal procedures and will make the necessary
disclosure in accordance with its articles of association and comply with the
applicable Listing Rules when it enters into any agreement with any commercial
bank for financing the Acquisition.
IMPLICATIONS
UNDER THE LISTING RULES
The
Group
has acquired in aggregate 37 Boeing B737-800 aircraft and six Boeing B777F
freighters from Boeing within 12 months from the date of this announcement.
Please refer to the announcements published by the Company on 24 August 2006,
16
October 2006 and 16 July 2007 for further details of these previous
acquisitions. Pursuant to Rule 14.22 of the Listing Rules, the relevant
applicable percentage ratio for the Acquisition, aggregated with the Previous
Boeing Aircraft Purchase with regards to the consideration test under Rule
14.07
of the Listing Rules is above 100%, the Acquisition together with the Previous
Boeing Aircraft Purchase constitute a very substantial acquisition of the
Company, and therefore is subject to approval by the Company’s shareholders
under Rule 14.49 of the Listing Rules. This announcement is also made pursuant
to Rule 13.09(1) of the Listing Rules.
None
of
the shareholders of the Company is required to abstain from voting in respect
of
the proposed resolution to approve the Acquisition.
The
Acquisition is subject to the approval of the relevant government authorities
in
the PRC and is required to be disclosed pursuant to the relevant rules and
regulations of the Shanghai Stock Exchange.
REASONS
FOR THE ACQUISITION
The
Directors believe that the Acquisition is beneficial to the implementation
of
the Company’s development strategy and improvement of the Company’s operating
capacity in order to accommodate the continuous growth in demand for aviation
services in the PRC. It is also believed that the Acquisition will facilitate
the implementation of the Company’s plan to replace its old aircraft with new
aircraft and enhance the competitiveness and core competence of the Company.
The
Boeing Aircraft, in addition to the 37 Boeing B737-800 aircraft, the six Boeing
B777F freighters and the 20 Airbus A320 series aircraft acquired by the Group
in
the past 12 months from the date of this announcement, will increase the ATKs
of
the Group by 32.8%.
The
Directors, including the independent non-executive Directors, believe that
the
terms of the Boeing Aircraft Acquisition Agreement are fair and reasonable,
are
on normal commercial terms and in the interests of the Company and its
shareholders as a whole.
FURTHER
INFORMATION
The
Company will send a circular containing the information required under the
Listing Rules in relation to the Acquisition within 21 days after the
publication of this announcement. A notice to the shareholders of the Company
convening a general meeting of the shareholders to approve the Acquisition
will
be despatched to the shareholders of the Company as soon as
practicable.
4
DEFINITIONS
In
this
announcement, unless the context requires otherwise, the following terms shall
have the following meanings:
|
“Acquisition”
|
the
acquisition of the Boeing Aircraft under the Boeing Aircraft Acquisition
Agreement
|
|
|
“available
tonne kilometers”
or
“ATKs”
|
the
tones of capacity available for the transportation of revenue load
(passengers and/or cargo) multiplied by the kilometres
flown
|
|
|
“Board”
|
the
board of Directors
|
|
|
“Boeing”
|
the
Boeing Company, a company incorporated in the State of Delaware
of the United States of America
|
|
|
“Boeing
Aircraft”
|
55
Boeing B737-700 and B737-800 aircraft, the subject matter of the
Boeing Aircraft Acquisition Agreement
|
|
|
“Boeing
Aircraft Acquisition
Agreement”
|
the
aircraft acquisition agreement entered into between Boeing and
the Company on 20 August 2007, pursuant to which the Company
agreed to acquire and Boeing agreed to sell the Boeing Aircraft
|
|
|
“Company”
|
China
Southern Airlines Company Limited, a joint stock company incorporated
in the PRC with limited liability
|
|
|
|
||
|
“Director(s)”
|
the
director(s) of the Company
|
|
|
|
||
|
“Group”
|
the
Company and its subsidiaries (as defined under the Listing
Rules)
|
|
|
|
||
|
“Listing
Rules”
|
the
Rules Governing the Listing of Securities on the Stock
Exchange
|
|
|
“PRC”
|
the
People’s Republic of China
|
|
|
“Previous
Boeing Aircraft
Acquisition
Agreements”
|
the
agreements dated 22 August 2006, 13 October 2006 and 16 July 2007,
entered
into between Xiamen Airlines as purchaser and Boeing as vendor pursuant
to
which Xiamen Airlines agreed to acquire and Boeing agreed to sell
in
aggregate of 37 Boeing B737-800 aircraft
|
|
|
“Previous
Boeing
Aircraft
Purchase”
|
the
acquisition from Boeing of (a) six Boeing B737-800 aircraft by Xiamen
Airlines on 22 August 2006, (b) six Boeing B737-800 aircraft by Xiamen
Airlines on 13 October 2006, (c) six Boeing B777F freighters by the
Company on 13 October 2006 and (d) 25 Boeing B737-800 aircraft by
Xiamen
Airlines on 16 July 2007
|
5
|
“Stock
Exchange”
|
The
Stock Exchange of Hong Kong Limited
|
|
|
“US
dollars” or “US$”
|
United
States dollars, the lawful currency of the United States of
America
|
|
|
“Xiamen
Airlines”
|
Xiamen
Airlines Company Limited, a limited liability company incorporated
in the
PRC and a subsidiary (as defined in the Listing Rules) owned as to
60% by
the Company
|
|
By
Order of the Board
|
||
|
Su
Liang
|
||
|
Company
Secretary
|
Guangzhou,
the People’s Republic of China
20
August
2007
As
at
the date of this announcement, the Directors include Liu Shao Yong, Li Wen
Xin,
Wang Quan Hua, Zhao Liu An, Si Xian Min, Tan Wan Geng, Xu Jie Bo and Chen Zhen
You as executive Directors; and Wang Zhi, Sui Guang Jun, Gong Hua Zhang and
Lin
Guang Yu as independent non-executive Directors.
6