Announcement on the Cash Option Exercise and Implementation of the Share Swap Absorption Merger by AVIC Avionics Systems Co., Ltd.
The company and all members of the board guarantee that the content of this announcement is true, accurate, and complete, with no false records, misleading statements, or significant omissions.
Special Reminder
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AVIC Electromechanical Systems Co., Ltd. (hereinafter referred to as "the Company" or "AVIC Electromechanical") stock (stock abbreviation: AVIC Electromechanical, stock code: 002013) has been continuously suspended from trading since the market opened on February 8, 2023. It will enter the cash option distribution, exercise declaration, and settlement phase, and will not trade until the share swap is implemented and converted into the A shares issued by AVIC Avionics Systems Co., Ltd. (hereinafter referred to as "AVIC Avionics") listed and traded on the Shanghai Stock Exchange. Investors are advised to take note.
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Shareholders entitled to the cash option can declare to exercise their cash option in whole or in part during the declaration period (from February 17 to February 23, 2023) between 9:30-11:30 AM and 1:00-3:00 PM, based on the cash option exercise price, transferring their shares to the cash option provider, AVIC Technology Co., Ltd. (hereinafter referred to as "AVIC Technology").
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As of February 7, 2023, the last trading day for the Company's stock, the closing price of AVIC Electromechanical was 10.78 CNY/share, and the cash option exercise price is 10.33 CNY/share. Shareholders who validly declare to exercise the cash option will receive cash compensation at the exercise price of 10.33 CNY/share. The reference stock price of the target stock (i.e., AVIC Electromechanical stock) does not exceed a 50% premium over the cash option agreed price, and the absolute value of the Delta of the rights contained in this cash option is not less than 5%. According to the relevant provisions of the "Shenzhen Stock Exchange Self-Regulatory Guidelines for Listed Companies No. 1 - Business Handling," the Company will provide the cash option through the trading system (displayed as "cash option" business during system declaration). Specific operational methods are detailed in the section "III. Method of Declaring to Exercise Cash Options" under "(1) Confirmation of Exercise."
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After the completion of the cash option distribution, AVIC Electromechanical will enter the delisting process, and its stock will be converted into the A shares of AVIC Avionics according to the share swap ratio. According to the Ministry of Finance, the State Administration of Taxation, and the China Securities Regulatory Commission's notices regarding the implementation of differentiated personal income tax policies for listed company dividends, individuals obtaining shares from public offerings and transfer markets will have their dividend income fully included in taxable income if held for one month or less; for holdings over one month to one year, 50% will be included; and for holdings over one year, personal income tax will be temporarily exempted. A uniform tax rate of 20% will apply to the above income. The income from shares obtained from public offerings and transfers includes shares converted from the merged company stock held by individuals. Investors holding AVIC Avionics A shares due to the share swap will have their holding period calculated from the date the A shares are registered in their accounts, and future dividend income from AVIC Avionics will be subject to the above provisions.
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This announcement only explains the specific arrangements for the cash option distribution and the declaration of exercise, and does not constitute advice for declaring to exercise cash options. Investors are advised to pay attention to investment risks. For details of this transaction plan, please read the full report on the share swap absorption merger of AVIC Avionics Systems Co., Ltd. and AVIC Electromechanical Systems Co., Ltd. disclosed on December 31, 2022, and related documents, and keep an eye on announcements issued by the Company. Unless otherwise defined in this announcement, the abbreviations or definitions of terms in this announcement have the same meanings as those in the report disclosed on December 31, 2022.