Air China aims for funds via placement
By Winny Wang |
March 13, 2010, Saturday
|
Print Edition
Print Edition
AIR China plans to raise 6.5 billion yuan (US$952 million) via a private placement to replenish working capital and fund its purchase of new planes to meet the booming demand from the aviation market.
The Beijing-based carrier will issue as much as 585 million yuan-denominated A shares at 9.58 yuan each to 10 institutions, including its parent, China National Aviation Holding Co, it said in a statement to the Shanghai Stock Exchange late Thursday.
The airline will also sell as much as 157 million Hong Kong-listed shares at HK$6.62 each to China National Aviation Corp (Group) Ltd, a wholly-owned subsidiary of CNAH, the statement said.
Air China's parent will commit at least 1.5 billion yuan in cash to subscribe for not more than 157 million new A shares, according to the statement.
All the proceeds will be used to replenish the company's working capital expenditure, with 1.5 billion yuan planned to be used to buy minor shares in Air China Cargo Co.
"The cash injection beats our expectation, which will reduce Air China's debt ratio by 4.6 percentage points to 71.8 percent," said Tao Wei, an analyst of China International Capital Co. "As China's flagship international carrier, Air China will benefit most from the recovery in international travel this year among domestic airlines."
Air China also plans to introduce 26 planes this year and 33 aircraft next year to meet the fast-growing demand. Building on the demand and profiting from fuel hedging gains, the carrier returned to the black in the first three quarters of last year with 3.81 billion yuan from a 9 billion yuan loss the previous year.
The Beijing-based carrier will issue as much as 585 million yuan-denominated A shares at 9.58 yuan each to 10 institutions, including its parent, China National Aviation Holding Co, it said in a statement to the Shanghai Stock Exchange late Thursday.
The airline will also sell as much as 157 million Hong Kong-listed shares at HK$6.62 each to China National Aviation Corp (Group) Ltd, a wholly-owned subsidiary of CNAH, the statement said.
Air China's parent will commit at least 1.5 billion yuan in cash to subscribe for not more than 157 million new A shares, according to the statement.
All the proceeds will be used to replenish the company's working capital expenditure, with 1.5 billion yuan planned to be used to buy minor shares in Air China Cargo Co.
"The cash injection beats our expectation, which will reduce Air China's debt ratio by 4.6 percentage points to 71.8 percent," said Tao Wei, an analyst of China International Capital Co. "As China's flagship international carrier, Air China will benefit most from the recovery in international travel this year among domestic airlines."
Air China also plans to introduce 26 planes this year and 33 aircraft next year to meet the fast-growing demand. Building on the demand and profiting from fuel hedging gains, the carrier returned to the black in the first three quarters of last year with 3.81 billion yuan from a 9 billion yuan loss the previous year.
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