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
February
16, 2011
CHINA
SOUTHERN AIRLINES COMPANY LIMITED
(Translation
of registrant's name into English)
278
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
February 14, 2011 on the Hong Kong Stock Exchange’s website at:
http://www.hkexnews.hk/listedco/listconews/sehk/20110214/LTN20110214297.pdf,
with respect to an announcement that the Company has entered into Lease
Agreements on February 14, 2011 with China Southern Air Holding Company
(“CSAHC”), the controlling shareholder of the Company, to renew the lease
agreements between the Company and CSAHC, for additional terms of three years
commencing from January 1, 2011 to December 31, 2013.
An
English version of the 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/ Liu Wei and
Xie Bing
Name: Liu
Wei and Xie Bing
Title:
Joint Company Secretaries
Date:
February 16, 2011
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.
CONTINUING
CONNECTED TRANSACTIONS
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Reference
is made to the announcement of the Company dated 10 January 2008 in
relation to various continuing connected transactions of the
Company.
As
the existing Lease Agreements expired on 31 December 2010 and the
transactions contemplated under the existing Lease Agreements shall
continue to be entered into on a recurring basis, in compliance with Rule
14A.35(1) of the Listing Rules, the Company and CSAHC have entered into
the Lease Agreements on 14 February 2011 to renew the leases
transactions.
As
previously announced by the Company on 29 December 2008, the Company
entered into the Lease Agreement 1 with CSAHC, pursuant to which CSAHC
continued to lease to the Company certain parcels of land and properties
at existing locations in Guangzhou, Haikou, Wuhan, Hengyang, Jingzhou and
Nanyang as well as some additional locations in Beijing, Shanghai,
Changsha, Shenyang, Dalian, Harbin and Changchun for a term of 3 years
from 1 January 2009 to 31 December 2011. Under Rule 14A.25 of the Listing
Rules, the continuing connected transactions contemplated under the Lease
Agreement 1 described above has been aggregated with the continuing
connected transactions contemplated under the Lease Agreements. Since each
of the applicable percentage ratio (other than the profits ratio) for the
transactions contemplated under the Lease Agreements (after the said
aggregation) is on an annual basis exceeding 0.1% and less than 5%, the
transactions contemplated under the Lease Agreements are only subject to
the reporting, announcement and annual review requirements and are exempt
from the independent shareholders’ approval requirements under the Listing
Rules.
The
Lease Agreements are also required to be disclosed pursuant to the
relevant rules and regulations of the Shanghai Stock
Exchange.
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Reference
is made to the announcement of China Southern Airlines Company Limited (the
“Company”) dated 10 January 2008 in relation to various continuing connected
transactions of the Company.
As the
existing Lease Agreements expired on 31 December 2010 and the transactions
contemplated under the existing Lease Agreements shall continue to be entered
into on a recurring basis, in compliance with Rule 14A.35(1) of The Rules
Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited
(the “Listing Rules”), the Company and China Southern Air Holding Company
(“CSAHC”) have entered into the Lease Agreements on 14 February 2011 to renew
the leases transactions. Details of the same are set out below:
1
LEASE
AGREEMENTS
The
Company and CSAHC entered into two lease agreements (the "Lease Agreements"),
namely, the building lease agreement (the "Building Lease Agreement") and the
land lease agreement (the "Land Lease Agreement") for a fixed term of three
years, commencing from 1 January 2008 to 31 December 2010. The existing Lease
Agreements are renewable, subject to compliance with the relevant requirements
of the Listing Rules by the Company. The Company entered into the Lease
Agreements on 14 February 2011 to renew for an additional term of three years,
commencing from 1 January 2011 to 31 December 2013.
Pursuant
to the Building Lease Agreement, CSAHC leases to the Company certain buildings,
facilities and other infrastructure related to the civil aviation businesses of
the Company situated at various locations in Shenyang, Dalian, Jilin, Harbin,
Xinjiang, etc.
Pursuant
to the Land Lease Agreement, CSAHC leases to the Company certain lands by
leasing the land use rights of such lands to the Company for the purposes of
civil aviation and related businesses of the Company.
It is
proposed that the maximum annual aggregate amount of rent payable by the Company
to CSAHC under the Land Lease Agreement and the Building Lease Agreement for
each of the three years ending 31 December 2013 shall not exceed RMB 56,329,131
and RMB 42,975,542, respectively, payable on a semi-annual basis. The annual
rental is determined after arm’s length negotiation between the parties and
adjusted with regard to the current market rental standard set in accordance
with the valuation prepared by Beijing Yintai Property Valuation Co., Ltd.
(北京銀通安泰房地產評估有限公司)
and the adjusted leased areas. The consideration will be funded wholly by the
Company’s internal resources.
For each
of the three years ended 31 December 2010, the aggregate historical transaction
amounts under the Building Lease Agreement were RMB 21,817,145, RMB 21,817,145
and RMB 21,817,145, respectively (historical cap was RMB 22 million), while the
aggregate transaction amounts under the Land Lease Agreement were approximately
RMB 42,975,542, RMB 42,975,542 and RMB 42,975,542, respectively (historical cap
was RMB 50 million).
The
Company has expanded its civil aviation business to locations where the lands
and buildings, facilities and other infrastructure under the Lease Agreements
are situated at since November 2004. The purchase and/or transfer of such
buildings, facilities, infrastructure and the land use rights will involve the
more time-consuming and costly process of transferring to the Company the
relevant titles, ownership or land use rights relating thereto; whereas the
renewal of the Lease Agreements allows the Company to continue to use those
buildings, facilities and infrastructure to operate its expanded civil aviation
business from the commencement date of the Lease Agreements at rents not higher
than the market rates for similar buildings, facilities, infrastructure and
lands.
Implications
under the Listing Rules
CSAHC is
the controlling shareholder of the Company, directly and indirectly holding
approximately 52.80% equity interest in the Company as of the date hereof, and
is therefore a connected person of the Company under the Listing Rules. The
principal business activity of CSAHC, based on its business licence, is that of
operating and managing, on behalf of the PRC government, certain state-owned
assets.
2
As CSAHC
is a connected person of the Company, the transactions contemplated under the
Lease Agreements constitute continuing connected transactions for the Company
under the Listing Rules. The board (the "Board") of directors (the "Directors")
of the Company (including the independent non-executive Directors) considers
that the terms of the Lease Agreements and the cap in respect thereof are fair
and reasonable and are entered into on normal commercial terms, or on terms no
less favourable than those available to independent third parties under the
prevailing local market conditions, in the ordinary and usual course of business
of the Company and in the interests of the Group and its shareholders as a
whole.
As
previously announced by the Company on 29 December 2008, the Company entered
into a lease agreement with CSAHC ("Lease Agreement 1"), pursuant to which CSAHC
continued to lease to the Company certain parcels of land and properties at
existing locations in Guangzhou, Haikou, Wuhan, Hengyang, Jingzhou and Nanyang
as well as some additional locations in Beijing, Shanghai, Changsha, Shenyang,
Dalian, Harbin and Changchun for a term of 3 years from 1 January 2009 to 31
December 2011. Under Rule 14A.25 of the Listing Rules, the continuing connected
transactions contemplated under the Lease Agreement 1 described above has been
aggregated with the continuing connected transactions contemplated under the
Lease Agreements. Since each of the applicable percentage ratio (other than the
profits ratio) for the transactions contemplated under the Lease Agreements
(after the said aggregation) is on an annual basis exceeding 0.1% and less than
5%, the transactions contemplated under the Lease Agreements are only subject to
the reporting, announcement and annual review requirements and are exempt from
the independent shareholders’ approval requirements under the Listing Rules.
Transactions contemplated under the Lease Agreements which took place since 1
January 2011 and prior to this announcement represented de minimis transactions
under Rule 14A.33(3) of the Listing Rules. There are no other transactions which
should be aggregated with the transactions contemplated under the Lease
Agreements under Rules 14.22 and 14A.25 of the Listing Rules.
The Lease
Agreements are also required to be disclosed pursuant to the relevant rules and
regulations of the Shanghai Stock Exchange.
GENERAL
Among the
11 Directors, three Directors, Mr. Si Xian Min, Mr. Li Wen Xin and Mr. Wang Quan
Hua, who were duly appointed to the Board by CSAHC, were required to abstain
from voting in respect of the resolutions to approve the Lease Agreements. All
the remaining Directors who were entitled to vote, unanimously approved the
resolutions approving the above Lease Agreements.
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By
order of the Board of
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China
Southern Airlines Company Limited
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Xie
Bing and Liu Wei
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Joint
Company Secretaries
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Guangzhou,
the People’s Republic of China
14
February 2011
3
As
at the date of this announcement, the Directors include Si Xian Min, Li Wen Xin
and Wang Quan Hua as non-executive Directors, Tan Wan Geng, Zhang Zi Fang, Xu
Jie Bo and Chen Zhen You as executive Directors; and Gong Hua Zhang, Lam Kwong
Yu, Wei Jin Cai and Ning Xiang Dong as independent non-executive
Directors.
4