10 September 2019

King & Wood Mallesons advises China Eastern Airlines’ mixed ownership reform

China Eastern Airlines Corporation Limited (“Eastern Airlines”, 600115. SH), which received CSRC’s approval, has recently made a private placement of A-shares and H-shares in an important move to respond to the deepening of China’s mixed ownership reform of SOEs and calls for strategic cooperation between state-owned and private sectors.

Eastern Airlines issued 1,394,245,744 A-shares to China Structural Reform Fund Co., Ltd., Shanghai JuneYao (Group) Co., Ltd. (“JuneYao Group”) and its subsidiary Juneyao Airlines Co., Ltd (“Juneyao Airlines”, 603885.SH), and Shanghai Jidaohang Enterprise Management Co., Ltd. at RMB 5.35 yuan per share. The company also issued 517,677,777 H-shares to Shanghai Juneyao Airline HongKong Limited at a price of HKD 4.29 per share in private placement. After this private placement, JuneYao Group and its subsidiary would jointly hold a 10% stake of Eastern Airlines.

In addition, Eastern Airlines Industry Investment Company Ltd. (“Eastern Airlines Industry Investment”), a wholly-owned subsidiary of China Eastern Air Holding Company Limited (“CEA Holding”), acquired shares of Juneyao Airlines by transferring Juneyao Airlines’s old shares and subscribing its newly issued shares. After the transaction, the acquired shares take up 15% of Juneyao Airlines’s total equity after the deal.

Eastern Airlines, a core business of CEA Holding, one of the three major Chinese state-owned airlines, got listed in New York, Hong Kong and Shanghai in 1997, making it the first among Chinese civil airlines that went public in three stock exchanges.

As the issuer’s lawyer for this private placement of Eastern Airlines, as well as the legal counsel for Eastern Airlines Industry Investment in its transferring of Juneyao Airlines’s old shares and subscription of new shares, King & Wood Mallesons (“KWM”) has fully engaged in the process including project demonstration, due diligence, declaration, feedback and share issuance. The project validates KWM’s unparalleled strengths in providing all-round and professional legal service, which is highly recognized by clients and other intermediary agencies.

This project was led by partners Zhao Xiaohong, Yang Haoming, Xu Hui, Chen Fuan and Liu Cheng.

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