Hainan Airlines to raise USD3.bn to fund fleet expansion, acquire Tianjin Airlines controlling stake

Hainan Airlines announced (13-Apr-2015) plans to raise CNY24 billion (USD3.8 billion) in a private placement to fund fleet expansion and increase its stake in Tianjin Airlines. The carrier said it will issue not more than 6.6 billion shares to up to 10 institutional and individual investors, with parent HNA Group committing to subscribe to 30%-40% of the new shares. Following the fund raising, Hainan Province SASAC, which will remain the carrier's controlling shareholder, will see its stake diluted from 34.8% to 22.6%. Grand China Air Co's stake in Hainan Airlines will be diluted from 28.2% to 18.3%. Hainan Airlines said that CNY11 billion (USD1.7 billion) would be used to finance the acquisition of 37 new aircraft from Boeing and Airbus. The fleet expansion, due to complete in 2018, will bring in CNY9.7 billion (USD1.5 billion) in additional revenue p/a. Another CNY8 billion (USD1.25 billion) would be used to acquire a controlling 48.2% stake in Tianjin Airlines, which the carrier believes would reduce competition within the group. The remaining CNY5 billion (USD781.3 million) will be used to repay bank loans. The share issuance is still subject to regulatory and shareholders' approval. As previously reported, Hainan Airlines announced in Mar-2015 plans to purchase 30 787-9s as it seeks to expand its international route network. [more - original PR - Chinese]