China Southern Airlines entered into an agreement with Guangzhou Tianshui, a wholly-owned subsidiary of CSA International, to sell 14 passenger A320s, which the carrier has been operating for 20 years.
According to the valuation prepared by China United Assets Appraisal Group Co. with the cost approach, the appraisal value of the Aircraft amounted to RMB370.68 million. As at 1 March 2018, the unaudited net asset value of the Aircraft was approximately RMB379 million.
The transaction is not expected to have any adverse material financial impact on the Group. The proceeds will be used as the Group’s general working capital.
The aircraft will be leased by Guangzhou Tianshui to China Southern with rental fee payable as RMB687,000 per aircraft per month for various terms ranging from 8 to 22 months, which constitute part of the Operating Lease Transactions under the 2018-2019 Finance and Lease Service Framework Agreement. The annual aggregate rental fee for 2018 and 2019 is estimated to be RMB107.895 million and RMB55.647 million, respectively.