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:
April 28, 2016
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By:
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/s/ Wang Jian
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Name: Wang Jian
Title: Joint 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.
On 28 April 2016,
CEA Research Center, a wholly-owned subsidiary of the Company entered into the Services Framework Agreement with Eastern Air Industrial
Investment, pursuant to which Eastern Air Industrial Investment and its subsidiaries will provide the property management services,
accommodation and catering services and ground transportation services to CEA Research Center.
Since the applicable
percentage ratios for the highest proposed cap for the eight months ending 31 December 2016 and the nine months ending 30 September
2017 for the continuing connected transactions under the Services Framework Agreement are more than 0.1% but less than 5%, in
accordance with Chapter 14A of the Listing Rules, the continuing connected transactions under the Services Framework Agreement
are only subject to the reporting and announcement requirements under Chapter 14A of the Listing Rules and are exempted from the
independent shareholders’ approval requirement.
THE SERVICES FRAMEWORK AGREEMENT
On 28 April 2016, CEA Research
Center, a wholly-owned subsidiary of the Company entered into the Services Framework Agreement with Eastern Air Industrial Investment,
pursuant to which Eastern Air Industrial Investment and its subsidiaries will provide the property management services, accommodation
and catering services and ground transportation services to CEA Research Center.
Term
The term of the Services
Framework Agreement will commence from 1 May 2016 to 30 September 2017. The parties to the Services Framework Agreement may extend
the term of the Services Framework Agreement upon mutual agreement in writing.
Services
Property management services:
Eastern Air Industrial Investment will provide the property management services to CEA Research Center for the properties with
a gross floor area of approximately 184,900 square meters. The services include the integrated management service, public facilities
maintenance service, public order maintenance service, public environment maintenance service and customized service. The property
management services adopt the 24 hours operation management system, whole life cycle of equipment and facilities management and
emergency management.
Accommodation and catering
services: a wholly-owned subsidiary of Eastern Air Industrial Investment will provide accommodation and catering services to CEA
Research Center including (i) 688 guest rooms with an aggregated gross floor area of 24,480 square metres; (ii) a dining hall with
a gross floor area of 2,000 square metres and a designed capacity of 2,000 people which is able to accommodate 1,000 people to
have foods simultaneously, and a kitchen with a gross floor area of 2,000 square metres. The accommodation services include reception
service and guest room management service for checked-in customers. The reception service includes reservation, guest receiving,
inquiry and baggage storage. The guest room management service includes room service and the cleaning of guest room as well as
the public areas of the apartment. The catering services include provision of optional meals, buffet, western-style food and Chinese
food for breakfast, lunch and dinner and provision of customized catering service according to proprietor’s requirement.
Ground transportation services:
Eastern Air Industrial Investment and its subsidiaries will provide ground transportation services (including airport shuttle,
airport ferry and transfer service) to students, management personnel, business personnel and staff of the CEA Research Centre
for their airport pick-up and commuting assurance.
Pricing policy
The services fees to be
charged by Eastern Air Industrial Investment and its subsidiaries to CEA Research Center will be determined by the parties based
on the quotation for the same type of services available from independent third parties with reference to relevant factors as mentioned
below. A department or an officer designated by two parties will be responsible for verifying the quotation and terms for the same
type of services from independent third parties (in general, inquires on quotation and terms will be made to at least two independent
third parties by e-mail, facsimile or telephone). The services fees will be determined by two parties after comparing and taking
into consideration certain factors including quotation, quality, scope, area, type and seasonality of services, and specific needs
of the parties. The services fees to be charged by Eastern Air Industrial Investment to CEA Research Center should not be higher
than the fees of the same type of services provided by Eastern Air Industrial Investment to independent third parties.
The service fees are payable monthly in arrears.
PROPOSED CAPS
Having considered
(i) property management services plan, implementation plan, services standard and full function open use of CEA Research Center
for the property management services; (ii) the labor costs and management fees of staff allocated based on the industry standard
and the needs of accommodation and catering services of CEA Research Center for the accommodation and catering services; and (iii)
the number of trainings in 2015 and the expected increase of 20% in the number of flights of the Company during 13th Five Year
Plan for the ground transportation services, the Directors propose to set the proposed caps for the eight months ending 31 December
2016 and the nine months ending 30 September 2017 for the continuing connected transactions under the Services Framework Agreement
as follows:
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Proposed caps for
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the
relevant period
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Eight
months
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Nine
months
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ending
31
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ending
30
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December
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September
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2016
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2017
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(from
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(from
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1
May
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1
January
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2016
to
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2017
to
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31
December
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30
September
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2016)
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2017)
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(RMB)
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(RMB)
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Maximum
services fee payable by CEA Research Center for
the property management services
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12,800,000
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24,200,000
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Maximum
services fee payable by CEA Research Center for
the accommodation and catering services
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9,000,000
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22,000,000
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Maximum
services fee payable by CEA Research Center for
the ground transportation services
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4,300,000
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12,700,000
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Total
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26,100,000
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58,900,000
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REASONS FOR AND BENEFITS
OF TRANSACTIONS
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Eastern Air Industrial
Investment has rich experience in providing relevant long-term services to civil aviation corporations and possesses the relevant
qualifications for operating such businesses. It also has professional aviation knowledge and fully understands the nature, content
and major concerns of the businesses of aviation corporations. It provided high-quality, high-efficient and cost-effectiveness
services in relation to property management, accommodation and catering and ground transportation to other subsidiaries of the
Company during their previous cooperation. The transactions entered into between CEA Research Center and Eastern Air Industrial
Investment is beneficial towards ensuring ordinary operation of CEA Research Center and facilitating the business development of
CEA Research Center.
In light of the
above factors, the Board (including the independent non-executive Directors) considers that the transactions under the Services
Framework Agreement are conducted on normal commercial terms or on terms no less favourable to the Company than those available
to independent third parties, and are entered into on a continuing or recurring basis in the ordinary course of business of the
Company, and are fair and reasonable and in the interests of the Company and its shareholders as a whole.
The Board (including the
independent non-executive Directors) further considers that the proposed caps for the transactions under the Services Framework
Agreement for the eight months ending 31 December 2016 and nine months ending 30 September 2017 are fair and reasonable.
IMPLICATIONS UNDER THE LISTING RULES
Eastern Air Industrial
Investment is a wholly-owned subsidiary of CEA Holding, the controlling shareholder of the Company, Eastern Air Industrial Investment
is a connected person of the Company under the Listing Rules. Therefore, the transactions contemplated under the Services Framework
Agreement entered into between CEA Research Center and Eastern Air Industrial Investment constitute continuing connected transactions
of the Company under the Listing Rules.
Since the applicable percentage
ratios for the highest proposed cap for the eight months ending 31 December 2016 and the nine months ending 30 September 2017 for
the continuing connected transactions under the Services Framework Agreement are more than 0.1% but less than 5%, in accordance
with Chapter 14A of the Listing Rules, the continuing connected transactions under the Services Framework Agreement are only subject
to the reporting and announcement requirements under Chapter 14A of the Listing Rules and are exempted from the independent shareholders’
approval requirement.
Mr. Liu Shaoyong (a Director
and chairman of the Company), Mr. Xu Zhao (a Director) and Mr. Gu Jiadan (a Director) are members of senior management of CEA Holding,
which may be regarded as having a material interest in the continuing connected transactions under the Services Framework Agreement
and therefore they have abstained from voting at the meeting of the Board convened for the purpose of approving the continuing
connected transactions. Save as disclosed above, none of the other Directors has a material interest in the continuing connected
transactions.
GENERAL
The Company
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The Company is principally engaged in the business of civil
aviation;
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CEA Research Center
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CEA Research Center is principally engaged in technological
research and development in the field of aviation and
provision of employee training within the Group and
conference services, a wholly-owned subsidiary of the
Company;
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Eastern Air Industrial Investment
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Eastern Air Industrial Investment is principally engaged in
the businesses in relation to construction materials, general
equipment, electrical appliances, groceries, maintenance of
ground equipment, labour service (excluding intermediary
labour service), communication network equipment
engineering, hotel management, property management and
leasing, a wholly-owned subsidiary of CEA Holding.
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DEFINITIONS
In this announcement, unless the context otherwise
requires, the following terms shall have the following meanings:
“Board”
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means the board of Directors;
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“CEA Holding”
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means 中國東方航空集團公司 (China Eastern Air Holding
Company), a wholly PRC state-owned enterprise and the
controlling shareholder of the Company directly or indirectly
holding approximately 62.07% of its issued share capital as
at the date of this announcement;
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“CEA Research Center”
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means 東航技術應用研發中心有限公司 (China Eastern
Airlines Technology Application Research Center Co., Ltd.),
a limited liability company incorporated in the PRC;
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“Company”
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means 中國東方航空股份有限公司 (China Eastern Airlines
Corporation Limited), a joint stock limited company
incorporated in the PRC with limited liability, whose H
shares, A shares and American depositary shares are listed
on the Stock Exchange, the Shanghai Stock Exchange and
the New York Stock Exchange, Inc., respectively;
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“connected person”
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has the same meaning ascribed to this term under the Listing
Rules;
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“Directors”
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means the directors of the Company;
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“Eastern Air Industrial Investment”
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means 東航實業集團有限公司 (Eastern Air
Investment Group Co., Ltd.), a limited liability company
incorporated in the PRC;
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“Listing Rules”
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means the Rules Governing the Listing of Securities on the
Stock Exchange;
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“PRC”
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means the People’s Republic of China;
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“RMB”
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means renminbi, the lawful currency of the PRC;
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“Services Framework
Agreement”
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means the property management and accommodation and
catering and ground transportation services framework
agreement dated 28 April 2016 entered into between CEA
Research Center and Eastern Air Industrial Investment;
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“Stock Exchange”
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means The Stock Exchange of Hong Kong Limited;
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“%”
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percentage.
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By order of the Board
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CHINA EASTERN AIRLINES CORPORATION LIMITED
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Wang Jian
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Joint Company Secretary
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Shanghai, the PRC
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28 April 2016
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As at the date of this
announcement, the Directors include Liu Shaoyong (Chairman), Ma Xulun (Vice Chairman, President), Xu Zhao (Director), Gu Jiadan
(Director), Li Yangmin (Director, Vice President), Tang Bing (Director, Vice President), Tian Liuwen (Director, Vice President),
Ji Weidong (Independent non-executive Director), Li Ruoshan (Independent non-executive Director), Ma Weihua (Independent non-executive
Director) and Shao Ruiqing (Independent non-executive Director).