China Eastern Airlines deal with SIA requires govt support

Beijing (XFN-ASIA) - China Eastern Airlines Corp Ltd (SHA

600115; HK 0670; NYSE CEA), one of the country's three largest airlines, said

negotiations to secure equity investment from Singapore International Airlines

Ltd are going smoothly, but a deal will require more regulatory support, the

Shanghai Securities News reported.

Li Fenghua, chairman of China Eastern, told the newspaper the company plans to sell up to a 25 pct stake to a foreign strategic investor.

"So far, the talks with Singapore Airlines are smooth ... but the conclusion of an agreement will depend on the support of the government," Li said.

Approving agencies include the China Securities Regulatory Commission and the State-owned Assets Supervision and Administration Commission, Li said.

He did not give a specific timetable for a proposed tie-up.

China Eastern Airlines said last week it was in talks with potential strategic investors, including Singapore Airlines.

The airline said it had consulted the government in order to smooth over any legal and policy-related obstacles to a deal.

Singapore Airlines (SIA) considers China a priority market and also confirmed it is holding talks with China Easternn, although a company spokesman said no decisions have been made.

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