Indicate by check mark whether the registrant files or will
file annual reports under cover of Form 20-F or Form 40-F:
x
Form 20-F
¨
Form
40-F
Indicate by check mark if the registrant is submitting the Form
6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
¨
Indicate by check mark if the registrant is submitting the Form
6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
¨
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
x
No
If "Yes" is marked, indicate below the file number
assigned to the registrant in connection with Rule 12g3-2(b):
n/a
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.
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China Eastern Airlines Corporation Limited
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(Registrant)
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Date
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December 19, 2016
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By
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/s/
Wang Jian
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Name: Wang Jian
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Title: Company Secretary
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Certain statements contained in this announcement may be regarded as "forward-looking statements"
within the meaning of the U.S. Securities Exchange Act of 1934, as amended. Such forward-looking statements involve known and
unknown risks, uncertainties and other factors, which may cause the actual performance, financial condition or results of operations
of the Company to be materially different from any future performance, financial condition or results of operations implied by
such forward-looking statements. Further information regarding these risks, uncertainties and other factors is included in the
Company's filings with the U.S. Securities and Exchange Commission. The forward-looking statements included in this announcement
represent the Company's views as of the date of this announcement. While the Company anticipates that subsequent events and developments
may cause the Company's views to change, the Company specifically disclaims any obligation to update these forward-looking statements,
unless required by applicable laws. These forward-looking statements should not be relied upon as representing the Company's views
as of any date subsequent to the date of this announcement.
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.
FURTHER
ANNOUNCEMENT
DISCLOSEABLE
AND CONNECTED TRANSACTION
DISPOSAL OF THE ENTIRE EQUITY INTEREST
IN
EASTERN LOGISTICS
Reference
is made to the announcement dated 29 November 2016 in respect of the proposed disposal of 100% equity interest in Eastern Air Logistics,
a wholly-owned subsidiary of the Company (the “
Disposal Announcement
”). Unless otherwise defined, terms used
in this announcement shall have the same meaning as those set out in the Disposal Announcement.
LISTING
RULES IMPLICATIONS
As disclosed
in the Disposal Announcement, the consideration of the Disposal is RMB2,432,544,211.50, which was determined with reference to
the Valuation Report.
According
to the Valuation Report, the asset-based approach has been adopted by the Valuer to appraise the value of the Disposal Group. In
appraising the value of a number of subsidiaries of Eastern Logistics, including Shanghai Eastern Transport, Eastern Express and
China Cargo Airlines, the income approach has been adopted by the Valuer.
According
to the Valuation Report, the book value (based on the financial statements of Eastern Logistics) and appraised value of the net
assets of Eastern Logistics as at 30 June 2016, being the market value of the entire shareholders’ equity of Eastern Logistics
as at 30 June 2016, were approximately RMB837.5763 million and RMB2,432.5442 million, respectively. In particular, Shanghai Eastern
Transport, Eastern Express and China Cargo Airlines have been covered under the scope of appraisal of long-term equity investments.
As of 30 June 2016, the book value (based on the financial statements of Eastern Logistics) and appraised value of long-term equity
investments were approximately RMB61.0537 million and RMB307.0401 million, respectively. As at 30 June 2016, the entire shareholders’
equity in China Cargo Airlines was appraised, using the income approach, at RMB-399,033,042.08. According to the Company Law of
the PRC, “the Shareholders’ equity of a limited liability company is limited to zero.” Accordingly, the appraised
value of China Cargo Airlines under long-term equity investments is zero. The respective appraised value of Shanghai Eastern Transport
and Eastern Express, based on the free net cashflow of the respective entities in certain future years, are RMB204,705,361.76
and RMB102,334,704.53 respectively.
In the Valuation
Report, discounted cash flow method has been adopted for the valuation of Shanghai Eastern Transport, Eastern Express and China
Cargo Airlines (the “
Relevant Valuation
”) and free cash flow has been selected for the calculation. Accordingly,
the requirements under Rules 14.60A and 14.62 of the Listing Rules are applicable.
PRINCIPAL
ASSUMPTIONS ADOPTED IN THE VALUATION OF THE LONG- TERM EQUITY INVESTMENTS OF EASTERN LOGISTICS IN THE VALUATION REPORT
Details
of the principal assumptions (including assumptions upon which the Relevant Valuation is based) are set out as follows:
General
assumptions
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1.
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Transaction assumption: assuming that all assets to be
valued are in the course of transaction and the evaluation assessed by the valuer is based on simulated market including terms
of transaction of the appraised assets.
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2.
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Open market assumption: open market assumption is an
assumption for the conditions of assets proposed to enter the market and how the assets will be affected under such market conditions.
Open market refers to the fully developed and sound market conditions, which is a competitive market with voluntary purchasers
and sellers, and in which purchasers and sellers are of equal standing and have opportunities and time to access sufficient market
information; parties to the transaction trade voluntarily, rationally, under no compulsion and without restriction.
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3.
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Continuous use assumption: continuous use assumption
is an assumption about the conditions of assets proposed to enter the market and status of the assets under such market conditions.
It is assumed that, firstly, the evaluated assets are under use, and secondly, the assets under use will be used continuously.
Under the continuous use assumption, change of uses of assets and the best conditions of use are not taken into account, and the
scope of use of the appraisal result is limited.
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4.
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Going-concern assumption: an evaluation made on the overall
assets of enterprise as the appraisal target. That means the enterprise, as the business entity, continues to operate towards
its business goals under the external environment it is in. The business operator is responsible for and capable of taking up
obligations; the enterprise operates in a lawful manner and makes appropriate profit to maintain the ability to operate in ongoing
concern.
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Assumptions
of income approach
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1.
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There is no material change to the relevant prevailing
laws, regulations and policies, and in the macroeconomic trend of the PRC; there is no material change in political, economic
and social environment of the regions where the parties to this transaction are in; there are no other unforeseen circumstances
or force majeure to cause material adverse changes.
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2.
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In respect of the actual situation of assets on the valuation
reference date (i.e. 30 June 2016), it is assumed that the enterprise will operate in ongoing concern.
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3.
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It is assumed that the operators of the relevant companies
are responsible and the management of the relevant companies have the ability to fulfill their duties.
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4.
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Unless otherwise illustrated, it is assumed that the
relevant companies are in full compliance with all relevant laws and regulations.
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5.
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It is assumed that the accounting policies to be adopted
by the relevant companies in the future will be basically consistent with those adopted in compiling the Valuation Report in material
respects.
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6.
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It is assumed that on the basis of the existing way of
management and governance level of the relevant companies, the scope and manner of operation is in line with the current directions.
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7.
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There are no material changes in the relevant interest
rate, exchange rate, tax bases and tax rates and policy-based levies.
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8.
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There is no other force majeure factors and unforeseen
factors that can lead to material adverse changes to the enterprise.
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9.
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It is assumed that the forecast annual cash flow of the
enterprise is generated in the period.
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10.
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It is assumed that the products or services of the enterprise
can maintain the existing competitive edges after the valuation reference date (i.e. 30 June 2016).
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11.
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It is assumed that the appraised entity can continue
to control the resources it owns (including human resources, sales network and customer resources etc.), to maintain its core
competitive edges.
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12.
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The appraised entity executes the development of the
transformed business of the logistics business division as scheduled.
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In accordance
with Rule 14.62(2) of the Listing Rules, the Company’s reporting accountants, Ernst & Young, has reviewed the calculations
upon which the Relevant Valuation set out in the Valuation Report is based. The letter issued by Ernst & Young in respect of
the calculations upon which the Relevant Valuation is based is set out in Appendix I to this announcement.
In accordance
with Rule 14.62(3) of the Listing Rules, the Board has reviewed the Relevant Valuation and confirms that the Relevant Valuation
in the Valuation Report has been made by the Board after due and careful enquiry. The letter from the Board is set out in Appendix
II to this announcement.
The qualifications of the experts
who have expressed conclusions or given opinions included in this announcement, and their respective relevant conclusions or opinions,
are as follows:
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Name
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Qualification
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Date of Conclusions
or Opinions
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Beijing Pan-China Assets
Appraisal Co., Ltd.
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Qualified PRC Valuer
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6 October 2016
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Ernst & Young
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Certified Public Accountants
in Hong Kong
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19 December 2016
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Each of the
above-mentioned experts has given and has not withdrawn its written consent to the issue of this announcement with the inclusion
of its letter in the form and context in which it is included.
To the best
of the Directors’ knowledge, the Valuer and Ernst & Young are third parties independent of the Company and its connected
persons.
As at the
date of this announcement, each of the above-mentioned experts did not have any direct or indirect interest in any assets which
have been, since 31 December 2015 (being the date to which the latest published audited accounts of the Group were made up), acquired
or disposed of by or leased to any member of the Group, or are proposed to be acquired or disposed of by or leased to any member
of the Group.
As at the
date of this announcement, none of the above-mentioned experts was beneficially interested in the share capital of any member of
the Group nor had any right, whether legally enforceable or not, to subscribe for or to nominate persons to subscribe for securities
in any member of the Group.
By order
of the Board
CHINA
EASTERN AIRLINES CORPORATION LIMITED
Wang Jian
Company
Secretary
Shanghai,
the People’s Republic of China
19 December
2016
As at
the date of this announcement, the directors of the Company include Liu Shaoyong (Chairman), Ma Xulun (Vice Chairman, President),
Li Yangmin (Director, Vice President), Xu Zhao (Director), Gu Jiadan (Director), Tang Bing (Director, Vice President), Tian Liuwen
(Director, Vice President), Li Ruoshan (Independent non-executive Director), Ma Weihua (Independent non-executive Director), Shao
Ruiqing (Independent non-executive Director) and Cai Hong Ping (Independent non-executive Director).
APPENDIX
I LETTER FROM ERNST & YOUNG
The following
is the text of a letter from the Company’s reporting accountants, Ernst & Young, Certified Public Accountants, Hong Kong,
relating to the Relevant Valuation, for, amongst other purposes, inclusion in this announcement.
REPORT
FROM REPORTING ACCOUNTANTS ON THE DISCOUNTED CASH FLOW FORECASTS IN CONNECTION WITH THE VALUATION OF ENTIRE EQUITY INTEREST IN
EASTERN AIR LOGISTICS CO., LTD.
To the
Directors of China Eastern Airlines Corporation Limited
We
have been engaged to report on the arithmetical accuracy of the calculations of the discounted cash flow forecasts (the “
Forecast
”)
on which the valuation dated 6 October 2016 prepared by Beijing Pan-China Assets Appraisal Co., Ltd. (the “
Valuer
”)
in respect of Shanghai Eastern Airlines Transport Co., Ltd. (“
Shanghai Eastern Transport
”), China Eastern Express
Co., Ltd. (“
Eastern Express
”) and China Cargo Airlines Co., Ltd. (“
China Cargo Airlines
”)
as at 30 June 2016 is based. The valuation is set out in the announcement of China Eastern Airlines Corporation Limited (the “
Company
”)
dated 19 December 2016 (the “
Announcement
”) in connection with the disposal of entire equity interest in Eastern
Air Logistics Co., Ltd. (the “
Target
”) which is the holding company of Shanghai Eastern Transport, Eastern
Express and China Cargo Airlines. The valuation based on the Forecast is regarded by The Stock Exchange of Hong Kong Limited as
a profit forecast under paragraph 14.61 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited
(the “
Listing Rules
”).
Directors’
responsibilities
The directors
of the Company (the “
Directors
”) are solely responsible for the Forecast. The Forecast has been prepared using
a set of bases and assumptions (the “
Assumptions
”), the completeness, reasonableness and validity of which are
the sole responsibility of the Directors. The Assumptions are set out in the section headed “Principal Assumptions Adopted
in the Valuation of the Long-Term Equity Investments of Eastern Logistics in the Valuation Report” of the Announcement.
Our
Independence and Quality Control
We have
complied with the independence and other ethical requirements of the Code of Ethics for Professional Accountants issued by the
Hong Kong Institute of Certified Public Accountants (“
HKICPA
”), which is founded on fundamental principles
of integrity, objectivity, professional competence and due care, confidentiality and professional behavior.
Our firm
applies Hong Kong Standard on Quality Control 1 Quality Control for Firms that Perform Audits and Reviews of Financial Statements,
and Other Assurance and Related Services Engagements, and accordingly maintains a comprehensive system of quality control including
documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal
and regulatory requirements.
Reporting
Accountants’ responsibilities
Our
responsibility is to express an opinion on the arithmetical accuracy of the calculations of the Forecast based on our work. The
Forecast does not involve the adoption of accounting policies.
We
conducted our engagement in accordance with Hong Kong Standard on Assurance Engagements 3000 (Revised) Assurance Engagements Other
Than Audits or Reviews of Historical Financial Information issued by the HKICPA. This standard requires that we plan and perform
our work to obtain reasonable assurance as to whether, so far as the arithmetical accuracy of the calculations are concerned,
the Directors have properly compiled the Forecast in accordance with the Assumptions adopted by the Directors. Our work consisted
primarily of checking the arithmetical accuracy of the calculations of the Forecast prepared based on the Assumptions made by
the Directors. Our work is substantially less in scope than an audit conducted in accordance with Hong Kong Standards on Auditing
issued by the HKICPA. Accordingly, we do not express an audit opinion.
We
are not reporting on the appropriateness and validity of the Assumptions on which the Forecast are based and thus express no opinion
whatsoever thereon. Our work does not constitute any valuation of the Target. The Assumptions used in the preparation of the Forecast
include hypothetical assumptions about future events and management actions that may or may not occur. Even if the events and
actions anticipated do occur, actual results are still likely to be different from the Forecast and the variation may be material.
Our work has been undertaken for the purpose of reporting solely to you under paragraph 14.62(2) of the Listing Rules and for
no other purpose. We accept no responsibility to any other person in respect of our work, or arising out of or in connection with
our work.
Opinion
Based on
the foregoing, in our opinion, so far as the arithmetical accuracy of the calculations of the Forecast is concerned, the Forecast
has been properly compiled in all material respects in accordance with the Assumptions adopted by the Directors.
Ernst
& Young
Certified
Public Accountants
22/F,
CITIC Tower, 1 Tim Mei Avenue, Central,
Hong Kong
19 December 2016
APPENDIX
II LETTER FROM THE BOARD
The following
is the text of the letter from the Board relating to the Relevant Valuation, for, amongst other purposes, inclusion in this announcement.
19 December
2016
The
Stock Exchange of Hong Kong Limited
11/F, One International Finance
Centre,
1 Harbour View Street, Central,
Hong Kong
Dear Sir
or Madam,
Company:
China Eastern Airlines Corporation Limited (the “
Company
”)
Re: The
letter required under Rule 14.62(3) of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited
(the “
Listing Rules
”)
Reference
is made to the announcement of the Company dated 29 November 2016, which mentioned a valuation report (the “
Valuation
Report
”) dated 6 October 2016 prepared by Beijing Pan-China Assets Appraisal Co., Ltd* (
北京天健興業資產評估有限公司
)
(the “
Valuer
”) on the appraised value, as of 30 June 2016, of 100% equity interest in Eastern Air Logistics
Co., Ltd.* (東方航空物流有限公司) (“
Eastern Logistics
”).
The board
of directors of the Company (the “
Board
”) has reviewed the valuation basis and assumptions set out in the Valuation
Report, for which the Valuer is responsible. The Board has also considered the letter issued by the Company’s reporting
accountants, Ernst & Young, on 19 December 2016, in respect of the calculations upon which the valuation of Shanghai Eastern
Airlines Transport Co., Ltd.* (上海東方航空運輸有限公司),
China Eastern Express Co., Ltd* (上海東航快遞有限公司) and China Cargo
Airlines Co., Ltd* (中國貨運航空有限公司) (the “
Relevant
Valuation
”) is based.
On the basis
of the foregoing, as required under Rule 14.62(3) of the Listing Rules, the Board confirms that the Relevant Valuation in the Valuation
Report has been made after due and careful enquiry.
On behalf
of the Board
中國東方航空股份有限公司
CHINA
EASTERN AIRLINES CORPORATION LIMITED
Wang
Jian
Company
Secretary
*
For
identification purpose only