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Air China gains control of Shenzhen Airlines
By Winny Wang |
March 22, 2010, Monday
|
Online Edition
Online Edition
AIR China will spend 682 million yuan (US$99.85 million) to gain control of Shenzhen Airlines as part of its efforts to dominate the southern Chinese air hub.
The Beijing-based carrier will increase its stake in the Shenzhen carrier to 51 percent from 25 percent after the investment, it told Shanghai Stock Exchange today.
Total Logistics, a wholly owned subsidiary of Shenzhen International Holdings Ltd, will invest 348 million yuan to raise its stake in Shenzhen Air to 25 percent from 10 percent, the statement said.
Huirun Investment, the previous controller of Shenzhen Air, will have its 65-percent stake diluted to 24 percent after the cash injection. The Intermediate People's Court of Shenzhen has accepted the application for Huirun's bankruptcy filed by its creditor, according to the statement.
"The capital increase in Shenzhen Air would alleviate the pressure on the cash flow of Shezhen Air and be favorable to the improvement of the financial position of Shenzhen Air," Air China said.
The carrier said the deal will improve the two carriers' respective networks of domestic and international air routes and consolidate their market positions in the Pearl River Delta region.
The Beijing-based carrier will increase its stake in the Shenzhen carrier to 51 percent from 25 percent after the investment, it told Shanghai Stock Exchange today.
Total Logistics, a wholly owned subsidiary of Shenzhen International Holdings Ltd, will invest 348 million yuan to raise its stake in Shenzhen Air to 25 percent from 10 percent, the statement said.
Huirun Investment, the previous controller of Shenzhen Air, will have its 65-percent stake diluted to 24 percent after the cash injection. The Intermediate People's Court of Shenzhen has accepted the application for Huirun's bankruptcy filed by its creditor, according to the statement.
"The capital increase in Shenzhen Air would alleviate the pressure on the cash flow of Shezhen Air and be favorable to the improvement of the financial position of Shenzhen Air," Air China said.
The carrier said the deal will improve the two carriers' respective networks of domestic and international air routes and consolidate their market positions in the Pearl River Delta region.
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