China Eastern Airlines Corp stated (11-Sep-2012) it entered an agreement to sell 698.9 million Shanghai-listed shares priced at CNY3.28/share and 698.9 million Hong Kong-listed shares at HKD2.32/share to state-owned parent, CEA Holding and CES Finance, a wholly-owned subsidiary of CEA Holding. CEA Holding will acquire 241.5 million of the Shanghai-listed shares and CES Finance will acquire 457.3 million of the A-listed shares and all of the Hong Kong-listed shares. The carrier will raise CNY2.29 billion (USD361 million) from the Shanghai stock sale and HKD1.62 billion (USD209 million) in the Hong Kong offering, with the funds to be used to repay bank and financial institution as well as for boosting working capital. The carrier last traded at HKD2.32 in Hong Kong and CNY3.29 in Shanghai before trading was halted pending the announcement. Following the transactions, CEA Holdings will hold 43.63% of the the enlarged total share capital of the company and CES Finance will hold 20.72%. Air China announced a CNY1.05 billion (USD166 million) share sale to its state-owned parent in Apr-2012 after its parent received government subsidy. China Southern Airlines in Jun-2012 said it was planning a similar sale to raise up to CNY2 billion (USD316 million). The carrier also plans (11-Sep-2012) to issue CNY4000 million (USD625 million) of 270-day financing bills on 12-Sep-2012, based on a statement issued on the Shanghai Clearing House. ICBC and China Minsheng Bank have been selected as co-lead underwriters for the issue. [more - original PR - share sale] [more - original PR - board resolution re share sale] [more – original PR – financing bills - Chinese]
China Eastern Airlines raises USD570m through share sale, to issue USD625m in short-term bills
You may also be interested in the following articles...
Northeast Asia's outlook remains bright – and perhaps more so than before
A few years ago amidst the economic downturn it was Northeast Asia – with its main Chinese market – that was a strategic bright spot for aviation.
China-UK air service agreement permits growth as Chinese airlines constrained in most other markets
An agreement between China and the UK to more than double their air service agreement is good timing for both sides. Chinese airlines are finding an imbalance: they are taking delivery of widebody aircraft and more Chinese airlines are flying long haul but traffic rights to major markets – the US, Canada, Germany and France – are becoming depleted. Negotiations to add traffic rights have not succeeded, typically due to the foreign side being concerned about accessing Chinese slots or Russian overflight rights.
The agreement with the UK to expand the number of weekly passenger flights from each side from 40 to 100 reflects considerable pragmatism on the part of the UK: British Airways and Virgin Atlantic are not growing in China, and China is a large growth opportunity. The UK has lagged on Chinese tourism. It was only in 2015 that China became the UK's largest inbound market.