CALC Delivers Its First Ever Airbus A321neo to Hawaiian Airlines

CALC (the “Group”, SEHK stock code: 01848), a full value-chain aircraft solutions provider for global airlines, is pleased to announce that the Group has delivered an Airbus A321neo aircraft to Hawaiian Airlines. This aircraft is also the Group’s first ever A321neo to be delivered.

As of today, CALC delivered a total of 9 aircraft in 2018 and currently has a fleet of 115 aircraft, with a global clientele widely spread across 14 countries and regions in Asia Pacific, the Middle East, Europe, North America and Latin America. The Group continues to extend its global reach to solidify its leading position as a full value-chain solutions provider for global aviation industry.

THE HAWAIIAN AIRCRAFT LEASE AGREEMENT
On 29 December 2016 (after trading hours), the Company, through its wholly-owned special purpose vehicle (as the lessor), entered into the Hawaiian Aircraft Lease Agreement with Hawaiian (as the lessee), pursuant to which the Company, through this wholly-owned special purpose vehicle, agreed to lease the Hawaiian Aircraft to Hawaiian; and such lessor agreed to grant to Hawaiian the Purchase Option to purchase the Hawaiian Aircraft, exercisable on the Lease Expiry Date.

IMPLICATION OF THE LISTING RULES
As the applicable percentage ratio under Rule 14.07 of the Listing Rules for the Hawaiian Aircraft Lease Agreement is above 5% but below 25%, the Transaction constitutes a discloseable transaction of the Company and is therefore subject to the announcement requirement under Chapter 14 of the Listing Rules.

THE HAWAIIAN AIRCRAFT LEASE AGREEMENT
On 29 December 2016 (after trading hours), the Company, through its wholly-owned special purpose vehicle (as the lessor), entered into the Hawaiian Aircraft Lease Agreement with Hawaiian (as the lessee), pursuant to which the Company, through this wholly-owned special purpose vehicle, agreed to lease Hawaiian Aircraft to Hawaiian; and such lessor agreed to grant to Hawaiian the Purchase Option to purchase the Hawaiian Aircraft, exercisable on the Lease Expiry Date.

It is expected that the Hawaiian Aircraft Lease Agreement will be classified as a finance lease according to the Company’s accounting policies. The final accounting treatment will be confirmed on or before the delivery of the Hawaiian Aircraft and commencement of the Hawaiian Aircraft Lease Agreement.

Parties
(1) the Company, through its wholly-owned special purpose vehicle as the lessor; and (2) Hawaiian, as the lessee.

Aircraft to be leased
One Airbus A321neo aircraft.

Term
144 months from the date when the Hawaiian Aircraft is delivered to and accepted by Hawaiian.

Rental fees/Average annual return on assets
The expected average annual return on assets in respect of the Hawaiian Aircraft Lease Agreement is 3.17%, which is calculated by dividing average annual net profit by the aircraft purchase price. The return on assets for the lease of an aircraft is a reasonable measure of investment return for investing in the aviation industrial sector.

The rental fees for the Hawaiian Aircraft were determined after arm’s length negotiation between the parties and on normal commercial terms, and are comparable to the prevailing market rate for aircraft lease transactions of comparable nature.

In the event of a default by Hawaiian, the terms of the Hawaiian Aircraft Lease Agreement provide for re-possession of the Hawaiian Aircraft by the Company.

Conditions Precedent
Delivery of the Hawaiian Aircraft is conditional upon fulfilment or waiver by the relevant parties of certain conditions on or prior to the delivery date, including but not limited to, the provision of relevant documentation in form and substance satisfactory to the parties, due execution of the Hawaiian Aircraft Lease Agreement and/or ancillary Agreement by the parties, due payment of the first instalment of basic rent and security deposit by Hawaiian, and the delivery of the Hawaiian Aircraft from the manufacturer to the owner of the Hawaiian Aircraft.

Payment and delivery terms
The rental fees for the Hawaiian Aircraft are payable in cash monthly in advance throughout the term of the Hawaiian Aircraft Lease Agreement.

The Hawaiian Aircraft is expected to be delivered to Hawaiian in 2018.

Purchase Option
Pursuant to the Hawaiian Aircraft Lease Agreement, the lessor agreed to grant to Hawaiian the Purchase Option to purchase the Hawaiian Aircraft, exercisable on the Lease Expiry Date by payment of the pre-determined fixed price to the lessor immediately prior to transfer of title of Hawaiian Aircraft and provided that prior 12-month’s written notice is given by Hawaiian of its intention to exercise the Purchase Option to the lessor on the Lease Expiry Date.