Hong Kong (XFN-ASIA) - China National Aviation Corp (CNAC), which holds 12 pct of China Eastern Airlines (CEA), confirmed that it will not agree to the purchase of CEA stake by Singapore Airlines (SIA) and Temasek Holdings unless terms of the proposed investment are improved.

"We still expect that the (share) subscription resolutions will be improved in accordance with the suggestion made in our last clarification announcement, and we will not accept the subscription resolutions if they are not improved as expected," CNAC said in a statement issued last night.

It said it will put forward its own proposal if the Singapore firms' deal is not approved at a special meeting of CEA shareholders on Tuesday. A media report said yesterday that CNAC -- Air China's parent -- plans to launch a bid of around 5 hkd a share for the 24 pct stake in CEA that SIA and Temasek have offered to buy at 3.80 hkd a share.

CNAC said earlier that SIA-Temasek's share purchase offer "does not reflect the fair value" of CEA.

CEA shares yesterday closed down 11.06 pct at 7.16 on profit-taking after sharp gains in recent sessions on speculation over a counter-bid by CNAC.