Air China to control Shenzhen Airlines
By Winny Wang |
March 23, 2010, Tuesday
|
Print Edition
Print Edition
AIR China will spend 682 million yuan (US$99.85 million) to gain control of Shenzhen Airlines as it bids to dominate the aviation market in south China.
The Beijing-based carrier will increase its stake in the Shenzhen airline to 51 percent from 25 percent after the fund injection, it said in a statement to the Shanghai Stock Exchange.
Total Logistics, a wholly-owned subsidiary of Shenzhen International Holdings Ltd, will invest 348 million yuan to raise its stake in Shenzhen Airlines to 25 percent from 10 percent, the statement said.
Huirun Investment, the previous controller of the Shenzhen airline, will see its 65 percent stake diluted to 24 percent on completion of the deal. 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 Airlines would alleviate pressure on the cash flow for Shenzhen Airlines and be favorable to the improvement of the financial position of the airline," Air China said.
Air China said the deal will boost the two airlines' routes and consolidate their market positions in the Pearl River Delta region.
The Beijing-based carrier will increase its stake in the Shenzhen airline to 51 percent from 25 percent after the fund injection, it said in a statement to the Shanghai Stock Exchange.
Total Logistics, a wholly-owned subsidiary of Shenzhen International Holdings Ltd, will invest 348 million yuan to raise its stake in Shenzhen Airlines to 25 percent from 10 percent, the statement said.
Huirun Investment, the previous controller of the Shenzhen airline, will see its 65 percent stake diluted to 24 percent on completion of the deal. 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 Airlines would alleviate pressure on the cash flow for Shenzhen Airlines and be favorable to the improvement of the financial position of the airline," Air China said.
Air China said the deal will boost the two airlines' routes and consolidate their market positions in the Pearl River Delta region.
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