AVIC International : Announcements and Notices -

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(formerly known as CATIC Shenzhen Holdings Limited (深圳中航集團股份有限公司))

(a joint stock limited company incorporated in the People's Republic of China)

(Stock Code: 00161) DISCLOSEABLE TRANSACTION DISPOSAL OF 75% EQUITY INTEREST IN GUANGDONG HANGYUE EQUITY TRANSACTION AGREEMENT

References are made to the announcements of the Company dated 27 October 2016 and 2 December 2016, respectively, in relation to the potential disposal of 75% equity interest in Guangdong Hangyue, a non-wholly owned subsidiary of the Company, through a public tender process to be conducted on CBEE.

The Board is pleased to announce that on 31 December 2016, the Company entered into the Equity Transaction Agreement with the Purchaser in respect of the Disposal at a consideration of RMB600,000,000.

Upon completion of the Disposal, Guangdong Hangyue will cease to be a subsidiary of the Company, and thus its financial statements will not be consolidated into the Group.

LISTING RULES IMPLICATIONS

As one or more of the applicable percentage ratios set out in Rule 14.07 of the Listing Rules in respect of the Equity Transaction Agreement and the transactions contemplated thereunder is/are more than 5% but all of them are less than 25%, the Equity Transaction Agreement and the transactions contemplated thereunder constitute discloseable transactions for the Company and are subject to the notification and announcement requirements under Chapter 14 of the Listing Rules.

INTRODUCTION

References are made to the announcements of the Company dated 27 October 2016 and 2 December 2016, respectively, in relation to the potential disposal of 75% equity interest in Guangdong Hangyue, a non-wholly owned subsidiary of the Company, through a public tender process to be conducted on CBEE.

The Board is pleased to announce that on 31 December 2016, the Company entered into the Equity Transaction Agreement with the Purchaser in respect of the Disposal at a consideration of RMB600,000,000.

Upon completion of the Disposal, Guangdong Hangyue will cease to be a subsidiary of the Company, and thus its financial statements will not be consolidated into the Group.

EQUITY TRANSACTION AGREEMENT

The principal terms of the Equity Transaction Agreement are summarised below:

Date: 31 December 2016 Parties: (a) The Company (as vendor); and

(b) The Purchaser (as purchaser)

The transaction was arranged through a public tender process (listing-for-sale) (公開掛牌) conducted on CBEE, which is an open exchange platform for the trading of assets and equities.

To the best of the Directors' knowledge, information and belief having made all reasonable enquiry, the Purchaser and its ultimate beneficial owners are Independent Third Parties.

Subject Matter: The Disposal by the Company Consideration: RMB600,000,000, which shall be satisfied by the Purchaser

in the following manner:

1. RMB600,000,000 shall be satisfied by cash in one (1) lump-sum payment to a designated account of CBEE on or before 31 December 2016; and

2. RMB600,000,000 shall be transferred to a designated account of the Company by CBEE within three (3) business days after the issue of the equity transaction certificates in relation to the Disposal by CBEE.

The consideration was based on the base price of open offer through CBEE, which is determined with reference to the appraised value of Guangdong Hangyue's equity interest approved by the relevant regulatory authority of State-owned assets in the PRC and the market price of the real estate market in Guangzhou.

Conditions Precedent: Completion of the Disposal is conditional upon the

fulfillment of the following conditions:

1. The Company having completed the approval and filing legal procedures regarding the Disposal under the Equity Transaction Agreement in accordance with the laws;

2. The Company having completed all the procedures in relation to the open offer through CBEE in accordance with the relevant laws, rules, regulations and policies; and

3. The Purchaser having completed the approval or authorisation procedures in respect of the Disposal in accordance with the relevant laws and its articles of association.

Other major terms: (a) The Company shall procure Guangdong Hangyue to

deal with the business registration in respect of the Disposal within five (5) business days after receiving the equity transaction certificates issued by CBEE, and the Purchaser shall provide necessary assistance and cooperation.

1. Completion of the Disposal under the Equity Transfer Agreement shall take place on the date of completion of the business registration in respect of the Disposal and issuance of the new business license of Guangdong Hangyue by the registration authority.

2. The profit and loss of relevant assets of Guangdong Hangyue during the period from the appraisal reference date of Guangdong Hangyue, i.e. 31 August 2016, to the completion of the Disposal under the Equity Transfer Agreement shall be borne by the Purchaser, unless the Company fails to perform the obligation of due care.

INFORMATION ABOUT GUANGDONG HANGYUE

Guangdong Hangyue is a limited liability company established on 31 August 2016 in the PRC and was split as a new company from Guangdong International Building Industrial Co., Ltd.* (廣東國際大廈實業有限公司). It is held as to 75% and 25% by the Company and AVIC Trust Co., Ltd. with a registered capital of RMB350 million. Guangdong Hangyue is principally engaged in office lease (sale), tourism, commerce, car custody, hotel equipment installation, maintenance, consulting, interior decoration engineering, property intermediary and indoor and outdoor cleaning services.

As at the appraisal reference date of 31 August 2016, according to the appraisal report issued by an independent asset appraisal institution, Guangdong Hangyue had total assets of RMB773,449,400, total liabilities of RMB891,478,800 and owner's equity of RMB-118,029,300. As such, the net liabilities of Guangdong Hangyue as at 31 August 2016 is RMB118,029,400. Since Guangdong Hangyue was established in August 2016, neither revenue nor profit was recorded as at the date of August 2016.

INFORMATION OF THE PURCHASER

The Purchaser is a joint stock limited company established in the PRC, and is principally engaged in insurance business.

INFORMATION ABOUT THE COMPANY AND GROUP

The Company is an investment holding company. The Group is principally engaged in the business of high-tech electronic products, retails and customer products, real estate and trading and logistics.

FINANCIAL IMPACT AND USE OF PROCEEDS FROM THE DISPOSAL

Immediately after completion of the Disposal, Guangdong Hangyue will cease to be a subsidiary of the Company and the financial statements of Guangdong Hangyue will no longer be consolidated into the Group's financial statements.

It is anticipated that upon completion of the Disposal, the Group would realise a net gain of approximately RMB364,270,000, which represents the difference between the consideration of the Disposal and the total investment cost incurred by the Company in Guangdong Hangyue.

The Directors currently intend to apply the net proceeds from the Disposal (after deducting relevant costs and expenses in connection with the Disposal) as general working capital and repayment of bank loans of the Group.

REASONS FOR AND BENEFITS OF THE EQUITY TRANSACTION AGREEMENT

In the future, the Group will deepen its strategic transformation, accelerate its business focus and continuously optimize its business structure and resources deployment. The Board considers that the Disposal is conducive to enhancing the Group's performance and improving the corporate asset and liabilities structure and efficiency of asset operation.