China Eastern Airlines Announces Connected Transaction for Sale of Hongqiao Base Properties
China Eastern Airlines Corporation Limited (Stock Code: 00670) announced on January 5, 2026, details of a connected transaction involving the sale of land and properties by its wholly-owned subsidiary Shanghai Airlines to China Cargo Airlines Limited.
On November 19, 2025, the Company's Board of Directors at its 12th meeting in 2025 unanimously approved the proposal regarding the sale of the Sui Ning Road Shanghai Airlines Hongqiao Base land and properties, agreeing that Shanghai Airlines would transfer its Shanghai Airlines Hongqiao Base to China Cargo Airlines, with the transfer price determined based on the assessed value filed with relevant competent authorities.
On January 5, 2026, Shanghai Airlines and China Cargo Airlines signed a real estate sales contract. The subject property comprises the land use rights and above-ground buildings, ancillary facilities and equipment of the Shanghai Airlines Hongqiao Base located at Sui Ning Road, Changning District, Shanghai. The state-owned land use rights holder is Shanghai Airlines, with the address at No. 2550 Hongqiao Road, Changning District, Shanghai (street address No. 23 Sui Ning Road). The certified building area is 23,182.84 square meters and certified land area is 32,828 square meters. The transaction asset is free from mortgages, pledges or any other transfer restrictions, and is not involved in litigation, arbitration, seizure, freezing or other judicial measures.
The transaction price is based on an asset evaluation report dated June 30, 2025, prepared by independent and qualified appraiser Shanghai Dongzhou Asset Appraisal Co., Ltd. using the income approach, which assessed the value at RMB137.6018 million. After negotiation, the transaction price was set at RMB137.60 million. The transferee, China Cargo Airlines, shall pay the full transfer price in one lump sum by cash within 10 working days after the contract becomes effective and upon receipt of the invoice to the designated bank account of Shanghai Airlines. Both parties confirmed they will jointly apply for transfer procedures at the real estate transaction center within 60 working days after the contract becomes effective.
Following the transfer of the Shanghai Airlines Hongqiao Base, the Company expects to recognize a gain of approximately RMB43.5 million. The aforementioned financial impact is for illustrative purposes only, and the final gain recognized in the Company's financial statements will depend on, among other factors, actual costs and expenses related to the disposal, the net book value of the subject asset on completion date, and the Company's audited consolidated financial statements. The Company intends to use the proceeds for its daily operations.
The transaction will help optimize Shanghai Airlines' asset-liability structure and recoup funds to support its main business development. Based on the foregoing, the Directors (including independent non-executive directors) consider that the transaction was negotiated on an arm's length basis, on normal commercial terms, and entered into in the ordinary course of the Company's business, and is fair and reasonable and in the overall interests of the Company and its shareholders.
As of the announcement date, Shanghai Airlines is a wholly-owned subsidiary of the Company, China Cargo Airlines is a holding subsidiary of Eastern Air Logistics, and China Eastern Air Group is the controlling shareholder of both Eastern Air Logistics and the Company, holding 54.7574% of the Company's shares. Therefore, China Cargo Airlines is a connected person of the Company under the Hong Kong Listing Rules, and the transaction constitutes a connected transaction under Chapter 14A of the Listing Rules. As the highest applicable percentage ratio exceeds 0.1% but is below 5%, the transaction is subject to reporting, announcement and annual review requirements but is exempt from independent shareholders' approval.
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