If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your licensed securities dealer or registered institution in securities, bank manager, stock broker, solicitor, professional accountant or other appropriate independent advisers. If you have sold or transferred all your shares in TravelSky Technology Limited, you should at once hand this circular together with the accompanying form of proxy to the purchaser or transferee or to the bank, licensed securities dealer or registered institution in securities or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee. Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, 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 circular. (A joint stock limited company incorporated in the People’s Republic of China with limited liability) (Stock Code: 0696) CONTINUING CONNECTED TRANSACTION AND AMENDMENTS TO ARTICLES OF ASSOCIATION AND NOTICE OF EGM Independent financial adviser to the Independent Board Committee and the Independent Shareholders A letter from the Board is set out on pages 4 to 11 of this circular. A letter from the Independent Board Committee is set out on page 12 of this circular. A letter from China Merchants containing its advice to the Independent Board Committee and the Independent Shareholders is set out on pages 13 to 21 of this circular. A notice convening the EGM to be held at Conference Room, 2/F, Prime Hotel, 2 Wangfujing Ave., Beijing, the PRC at 10:00 a.m. on Tuesday, 25 January 2011 is set out on pages 25 to 27 of this circular. Whether or not you intend to be present at the EGM, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and return the same to the branch share registrar of the Company in Hong Kong, Hong Kong Registrars Ltd., at Shops 1712-1716, 17/F, Hopewell Centre, 183 Queen’s Road East, Wan Chai, Hong Kong (in case of holders of H Shares) or the registered office of the Company at 7 Yu Min Da Street, Houshayu Town, Shunyi District, Beijing 101308, the PRC (in case of holders of Domestic Shares), no later than 24 hours before the time fixed for holding the EGM or any adjournment thereof. Completion and delivery of the form of proxy will not prevent you from attending, and voting at, the EGM or any adjournment thereof if you so wish. THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION 3 December 2010
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If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult
your licensed securities dealer or registered institution in securities, bank manager, stock broker, solicitor,
professional accountant or other appropriate independent advisers.
If you have sold or transferred all your shares in TravelSky Technology Limited, you should at once hand
this circular together with the accompanying form of proxy to the purchaser or transferee or to the bank,
licensed securities dealer or registered institution in securities or other agent through whom the sale or transfer
was effected for transmission to the purchaser or transferee.
Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no
responsibility for the contents of this circular, 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 circular.
(A joint stock limited company incorporated in the People’s Republic of China with limited liability)
(Stock Code: 0696)
CONTINUING CONNECTED TRANSACTION
AND
AMENDMENTS TO ARTICLES OF ASSOCIATION
AND
NOTICE OF EGM
Independent financial adviser to
the Independent Board Committee and the Independent Shareholders
A letter from the Board is set out on pages 4 to 11 of this circular. A letter from the Independent Board
Committee is set out on page 12 of this circular. A letter from China Merchants containing its advice to the
Independent Board Committee and the Independent Shareholders is set out on pages 13 to 21 of this circular.
A notice convening the EGM to be held at Conference Room, 2/F, Prime Hotel, 2 Wangfujing Ave., Beijing,
the PRC at 10:00 a.m. on Tuesday, 25 January 2011 is set out on pages 25 to 27 of this circular. Whether or
not you intend to be present at the EGM, you are requested to complete the accompanying form of proxy in
accordance with the instructions printed thereon and return the same to the branch share registrar of the
Company in Hong Kong, Hong Kong Registrars Ltd., at Shops 1712-1716, 17/F, Hopewell Centre, 183 Queen’s
Road East, Wan Chai, Hong Kong (in case of holders of H Shares) or the registered office of the Company at
7 Yu Min Da Street, Houshayu Town, Shunyi District, Beijing 101308, the PRC (in case of holders of Domestic
Shares), no later than 24 hours before the time fixed for holding the EGM or any adjournment thereof.
Completion and delivery of the form of proxy will not prevent you from attending, and voting at, the EGM or
any adjournment thereof if you so wish.
THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION
3. The comparison of historical transaction amount of the Sichuan Airlines
Transactions and the Annual Caps for the year ending 31 December 2011
In respect of the Sichuan Airlines Transactions, the Annual Cap for the year ending
31 December 2011 is RMB152,642,500, which is (i) higher than the historical transaction
amount for the year ended 31 December 2009 of approximately RMB90,321,000 by
approximately 69.0%; and (ii) higher than the historical transaction amount for the year
ended 31 December 2008 of approximately RMB68,071,000 by approximately 124.2%,
representing a CAGR of approximately 30.9%.
4. The basis for the Annual Caps
As referred to in the Letter from the Board, the Annual Caps are determined with
reference to (i) the historical transaction amounts of the Sichuan Airlines Transactions for
the year ended 31 December 2009; (ii) a record growth of 32% on the transaction amounts
for 2009 as compared to that of 2008; and (iii) the estimated annual growth rate of 30%
(the “Adopted Growth Rate”) in the transaction volume taking into account of the
anticipated growth of the PRC’s aviation and travel industry as well as the increasing
frequency of business trips.
LETTER FROM CHINA MERCHANTS
– 19 –
We noted that, from the year ended 31 December 2007 to the year ended 31
December 2009, (i) the Group’s audited turnover achieved a CAGR of approximately
14.4%; and (ii) the Group’s total bookings on seats of flights of commercial airlines of
the PRC achieved a CAGR of approximately 10.8%. Notwithstanding the fact that the
Adopted Growth Rate (being 30%) is higher than the CAGR of each of (i) the Group’s
audited turnover from the year ended 31 December 2007 to the year ended 31 December
2009; and (ii) the Group’s total bookings on seats of flights of commercial airlines of the
PRC from the year ended 31 December 2007 to the year ended 31 December 2009, we
consider that the Adopted Growth Rate is acceptable, taking into account:
(i) the historical transaction amount of the Sichuan Airlines Transactions for the
year ended 31 December 2009 (of approximately RMB90,321,000) was higher
than the corresponding amount for the year ended 31 December 2008 (of
approximately RMB68,071,000) by more than 30%; and
(ii) the Annual Caps provide buffer to cater for the unanticipated growth in the
Group’s turnover, which in turn will benefit the Group’s business growth in the
three years ending 31 December 2013.
5. Overall opinion on the Annual Caps
We consider that the Annual Caps are fair and reasonable so far as the Independent
Shareholders are concerned, taking into account:
(i) the positive outlook of the aviation industry in the PRC;
(ii) the historical growth in the Group’s turnover and the booking of seats of
commercial airlines of the PRC through the Group’s operations;
(iii) the Annual Cap for the year ending 31 December 2013 is higher than the
historical transaction amount for the year ended 31 December 2009 of
approximately RMB90,321,000 by approximately 185.6%, representing a
CAGR of approximately 30%, which in turn is in line with the Adopted Growth
Rate; and
(iv) the Annual Caps would facilitate the Group’s business growth for the three
years ending 31 December 2013.
Based on the aforesaid, we consider that the Annual Caps are fair and reasonable so far
as the Independent Shareholders are concerned, and are in the interests of the Company and the
Shareholders as a whole.
LETTER FROM CHINA MERCHANTS
– 20 –
RECOMMENDATION
Having considered the above principal factors and reasons, we consider that (i) the
Sichuan Airlines Transactions are in the ordinary and usual course of business of the Group;
(ii) the terms of the Sichuan Airlines Services Agreement are on normal commercial terms and
are fair and reasonable so far as the Independent Shareholders are concerned and are in the
interests of the Company and the Shareholders as a whole; and (iii) the Annual Caps are fair
and reasonable so far as the Independent Shareholders are concerned and are in the interests
of the Company and the Shareholders as a whole.
Accordingly, we advise the Independent Board Committee to recommend the Independent
Shareholders to vote in favour of the proposed resolutions to approve the Sichuan Airlines
Transactions and the Annual Caps at the EGM. We also advise the Independent Shareholders
to vote in favour of the proposed resolutions to approve the Sichuan Airlines Transactions and
the Annual Caps at the EGM.
For and on behalf of
China Merchants Securities (HK) Co., Limited
Tony Wu
Managing Director and Head of
Investment Banking Department
Leo Chan
Managing Director and Co-Head of
Investment Banking Department
LETTER FROM CHINA MERCHANTS
– 21 –
1. RESPONSIBILITY STATEMENT
This circular, for which the Directors collectively and individually accept full
responsibility, includes particulars given in compliance with the Listing Rules for the purpose
of giving information with regard to the Company. The Directors, having made all reasonable
enquiries, confirm that to the best of their knowledge and belief the information contained in
this circular is accurate and complete in all material respects and not misleading or deceptive,
and there are no other matters the omission of which would make any statement herein or this
circular misleading.
2. INTERESTS AND SHORT POSITIONS OF DIRECTORS, SUPERVISORS AND
CHIEF EXECUTIVES IN THE SHARES, UNDERLYING SHARES AND
DEBENTURES OF THE COMPANY AND ASSOCIATED CORPORATIONS
As at the Latest Practicable Date, none of the Directors, Supervisors or chief executives
of the Company had any interests or short positions in any shares, underlying shares and
debentures of the Company or any of its associated corporations (as defined in Part XV of the
SFO) which are required to be notified to the Company and the Stock Exchange pursuant to
Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they
were taken or deemed to have under such provisions of the SFO), or are required to be entered
in the register maintained in accordance with Section 352 of the SFO, or are required to be
notified to the Company and the Stock Exchange pursuant to the Model Code for Securities
Transactions by Directors of Listed Issuers set out in Appendix 10 to the Listing Rules.
As at the Latest Practicable Date, each of China TravelSky Holding Company (中國民航信息集團公司), China Southern Air Holding Company (中國南方航空集團公司) and China
Eastern Air Holding Company (中國東方航空集團公司) had interest in the shares of the
Company which would fall to be disclosed to the Company under the provisions of Divisions
2 and 3 of Part XV of the SFO.
As at the Latest Practicable Date,
(a) Mr Xu Qiang (Chairman of the Company and an executive Director) is an employee
of China TravelSky Holding Company;
(b) Mr Wang Quanhua (a non-executive Director) is an employee of China Southern Air
Holding Company; and
(c) Mr Luo Chaogeng (a non-executive Director) is an employee of China Eastern Air
Holding Company.
Save as disclosed above, as at the Latest Practicable Date, none of the Directors or
Supervisors of the Company is a director, supervisor or employee of a company which had an
interest or short position in the shares and underlying shares of the Company which would fall
to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the
SFO.
APPENDIX GENERAL INFORMATION
– 22 –
3. SERVICE AGREEMENT
As at the Latest Practicable Date, none of the Directors or Supervisors had entered or
proposed to enter into a service agreement with any member of the Group (which will not
expire or is not determinable by the employer within one year without payment of
compensation (other than statutory compensation)).
4. MATERIAL CHANGES
The Directors are not aware of any material adverse change in the financial or trading
position of the Group since 31 December 2009, being the date to which the latest published
audited financial statements of the Group were made up.
5. INTEREST IN ASSETS
As at the Latest Practicable Date, none of the Directors or Supervisors had any interest,
direct or indirect, in any assets which had been since 31 December 2009, 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.
6. MATERIAL INTEREST IN CONTRACTS
As at the Latest Practicable Date, none of the Directors or Supervisors was materially
interested in any contracts or arrangement subsisting as at the date hereof which was significant
in relation to the business of the Group.
7. COMPETING INTEREST
As at the Latest Practicable Date, none of the Directors or their respective associates had
any interest in any business apart from the Company’s business which competes or is likely to
compete, either directly or indirectly, with the Company’s business.
8. EXPERT
(a) China Merchants is licensed under the SFO for Type 1 (dealing in securities), Type
2 (dealing in futures contracts), Type 4 (advising on securities), Type 6 (advising on
corporate finance) and Type 9 (asset management) regulated activities as defined
under the SFO. Its letter of advice to the Independent Board Committee and the
Independent Shareholders dated as of the date of this circular was given for the
purpose of incorporation herein.
(b) As at the Latest Practicable Date, China Merchants did not have any shareholding,
directly or indirectly, in any member of the Group or the right (whether legally
enforceable or not) to subscribe for or to nominate persons to subscribe for
securities in any member of the Group.
APPENDIX GENERAL INFORMATION
– 23 –
(c) As at the Latest Practicable Date, China Merchants did not have any interest, direct
or indirect, in any assets which had been since 31 December 2009, 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.
(d) China Merchants has given and has not withdrawn its written consent to the issue
of this circular with copy of its letter and the reference to its name and its advice
included in this circular in the form and context in which they respectively appear.
(e) The letter given by China Merchants is given as at of the date of this circular for
incorporation herein.
9. GENERAL
The English text of this circular shall prevail over the Chinese text in case of
inconsistency.
10. DOCUMENTS AVAILABLE FOR INSPECTION
A copy of the Sichuan Airlines Services Agreement will be available for inspection at the
offices of Bird & Bird, 33/F, Three Pacific Place, 1 Queen’s Road East, Hong Kong during
normal business hours from the date of this circular up to and including the date of the EGM.
APPENDIX GENERAL INFORMATION
– 24 –
Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong
Limited take no responsibility for the contents of this notice, 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 notice.
(A joint stock limited company incorporated in the People’s Republic of China with limited liability)
(Stock Code: 0696)
NOTICE OF EXTRAORDINARY GENERAL MEETING
NOTICE IS HEREBY GIVEN that an extraordinary general meeting (the “EGM”) of
TravelSky Technology Limited (the “Company”) will be held at Conference Room, 2/F, Prime
Hotel, 2 Wangfujing Ave., Beijing, the PRC at 10:00 a.m. on Tuesday, 25 January 2011 to
consider and, if thought fit, approve the following resolutions:
ORDINARY RESOLUTION
1. “THAT:
(a) the form and substance of the Sichuan Airlines Services Agreement (as defined
in the circular (the “Circular”) of the Company dated 3 December 2010) (a
copy of which has been produced to the meeting marked “A” and signed by the
chairman of the meeting for the purpose of identification) in relation to the
provision of technology services by the Company to Sichuan Airlines
Company Limited (四川航空股份有限公司) for the period from 1 January 2011
to 31 December 2013 as more particularly set out in the Circular and all the
transactions contemplated thereunder be and are hereby approved, confirmed
and ratified;
(b) the Annual Caps for the transactions contemplated under the Sichuan Airlines
Services Agreement for the three years ending 31 December 2011, 2012 and
2013 respectively as shown in the Circular be and are hereby approved; and
(c) the directors of the Company (the “Directors”) be and are hereby authorised
to take any step as they consider necessary, desirable or expedient in
connection with the Sichuan Airlines Services Agreement and the transactions
contemplated thereunder.”
NOTICE OF EGM
– 25 –
SPECIAL RESOLUTION
2. “THAT:
(a) the articles of association of the Company (the “Articles”) be and are hereby
amended as follows:
(i) The 2nd paragraph of Article 1 be amended as follows:
“The existing business licence no. of the Company is
100000000034410.”;
(ii) “Shareholder 10: Shanghai Airlines Company Limited” be deleted from
the list of Promoters in the 3rd paragraph of Article 1 and thereafter the
original “Shareholder 11” to “Shareholder 15” be renumbered as
“Shareholder 10” to “Shareholder 14” accordingly.
(iii) The following be added as the 4th paragraph at the end of Article 20:
“Shareholding of Promoters:
Shareholder 1 held 571,484,393 shares, Shareholder 2 held 232,921,000
shares, Shareholder 3 held 218,829,000 shares, Shareholder 4 held
178,867,000 shares, Shareholder 5 held 16,770,000 shares, Shareholder 6
held 43,849,000 shares, Shareholder 7 held 22,100,000 shares,
Shareholder 8 held 15,119,000 shares, Shareholder 9 held 12,480,000
shares, Shareholder 10 held 8,697,000 shares, Shareholder 11 held
3,445,000 shares, Shareholder 12 held 2,600,000 shares, Shareholder 13
held 1,599,000 shares, Shareholder 14 held 338,000 shares.”
(iv) The following content about the shareholding of Promoters in the 2nd
paragraph of Article 21 be deleted: “whereas Shareholder 1 held
198,496,500 shares, Shareholder 2 held 116,460,500 shares, Shareholder
3 held 109,414,500 shares, Shareholder 4 held 89,433,500 shares,
Shareholder 5 held 2,658,500 shares, Shareholder 6 held 21,924,500
shares, Shareholder 7 held 11,050,000 shares, Shareholder 8 held
7,559,500 shares, Shareholder 9 held 6,240,000 shares, Shareholder 10
held 5,726,500 shares, Shareholder 11 held 4,348,500 shares, Shareholder
12 held 1,722,500 shares, Shareholder 13 held 1,300,000 shares,
Shareholder 14 held 799,500 shares, Shareholder 15 held 169,000
shares.”
NOTICE OF EGM
– 26 –
(b) the Directors be and are hereby authorised to file the amended Articles with the
State Administration for Industry and Commerce, the PRC, and to take any
other steps or sign any document as they consider necessary desirable or
expedient in connection with the aforementioned amendments to the Articles.
By order of the Board
TravelSky Technology Limited
Xu Qiang
Chairman
Beijing, the PRC
3 December 2010
Registered office:
7 Yu Min Da Street
Houshayu Town
Shunyi District
Beijing 101308
The PRC
Notes:
1. The register of holders of H shares of the Company (“H Shares”) will be closed from 25 December 2010 to25 January 2011 (both days inclusive), during which time no transfer of H Shares will be effected. Holders ofH Shares and domestic shares of the Company (“Domestic Shares”) whose names appear on the register ofmembers of the Company at the close of business on 24 December 2010 are entitled to attend the EGM.Transfers of H Shares must be lodged with the branch share registrar of the Company in Hong Kong, HongKong Registrars Ltd., at Shops 1712-1716, 17/F, Hopewell Centre, 183 Queen’s Road East, Wanchai, HongKong by 4:30 p.m. on 24 December 2010 in order to entitle the transferee to attend the EGM.
2. A member entitled to attend and vote at the EGM is entitled to appoint one or more than one proxy to attendand vote instead of him. A proxy need not be a member of the Company.
3. The instrument appointing a proxy must be in writing under the hand of the appointer or his attorney dulyauthorised in writing, or in the case of a legal person, must either be executed under its seal or under the handof a legal representative or other attorney duly authorised to sign the same. If that instrument is signed by anattorney of the appointer, the power of attorney authorising that attorney to sign, or other document ofauthorisation, must be notarially certified. To be valid, for holders of Domestic Shares, the notarially certifiedpower of attorney, or other document of authorisation, and the form of proxy must be delivered to theregistered address of the Company no later than 24 hours before the time appointed for the holding of themeeting. To be valid, for holders of H Shares, the above documents must be delivered to Hong Kong RegistrarsLtd. within the same period of time.
4. Completion and return of the form of proxy will not preclude a member from attending and voting in personat the EGM or any adjournment thereof. If such member attends the EGM, his form of proxy will be deemedto have been revoked.
5. Shareholders who intend to attend the EGM in person or by proxy should return the reply slip for attendingthe EGM to the registered address of the Company on or before 5 January 2011 personally or by mail or fax.
6. The EGM is expected to last for half a day. Shareholders (or their proxies) attending the EGM are responsiblefor their own transportation and accommodation expenses.
7. As at the date hereof, the board of the directors of the Company comprises:
Executive directors: Mr Xu Qiang (Chairman), Mr Cui Zhixiong and Mr Xiao Yinhong;Non-executive directors: Mr Wang Quanhua, Mr Luo Chaogeng and Mr Sun Yude;Independent non-executive directors: Mr Cheung Yuk Ming, Mr Zhou Deqiang and Mr Pan Chongyi.