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Cathay Pacific to sell equity stake in HAECO

8-Jun-2010 8:04 AM

Cathay Pacific agreed (07-Jun-2010) to sell all of its 15% shareholding in Hong Kong Aircraft Engineering Company Limited (HAECO) to Swire Pacific Ltd at HKD105 (USD13) per share for a total of HKD2,620 million (USD335.7 million). Further details include:

  • Share sale: Upon completion of the sale of the 24.9 million HAECO shares, which is expected to take place on or before 14-Jun-2010, Cathay will cease to hold any HAECO shares;
  • Financial effect of transaction: Cathay will record a profit of about HKD1,829 million (USD234.4 million) from the transaction;
  • Proceeds of transaction: The proceeds from the transaction will be applied towards other investments in Cathay Pacific’s core aviation business, including investments in new aircraft, in the new cargo terminal under construction at Hong Kong International Airport, in continuing enhancements to the airline’s products and services, as well as general working capital requirements;
  • Relationship between Cathay and HAECO: The longstanding operational relationship between Cathay Pacific and HAECO will remain "unchanged". Cathay Pacific added that HAECO has always been its main provider of MRO services while Cathay Pacific is HAECO’s largest customer airline. [more - Cathay Pacific] [more - Swire Pacific Transaction Document]

Cathay Pacific: “The transaction is driven by the strategic priorities of Cathay Pacific and will benefit our core aviation business ... We are committed to the continued growth of Cathay Pacific as Hong Kong's home carrier and are investing HKD51 billion in the airline over the next few years to further develop Hong Kong as the leading international aviation hub in Asia. We operate a fleet of 127 aircraft and currently have 31 aircraft on firm order for delivery before 2013. The company has recently resumed the construction of the HKD5.5 billion new cargo terminal at Hong Kong International Airport. The state of the art facility is expected to come into operation in 2013", John Slosar, COO. Source: Company Statement, 07-Jun-2010,