Juneyao plans to go public in Shanghai
Print Edition
JUNEYAO Airlines aims to raise 1.9 billion yuan (US$305 million) in an initial public offering in Shanghai to fund its fleet expansion.
The Shanghai-based private carrier plans to issue up to 200 million shares, or 29 percent of its enlarged total equity, according to a prospectus released by the China Securities Regulatory Commission.
Proceeds from the listing would fund the purchase of seven Airbus A320 jets and backup engines, it said.
Spring Airlines, China’s first budget carrier, has also applied for a US$400 million IPO to fund its fleet expansion.
In the prospectus, Juneyao warned about the risk of fluctuating fuel prices which accounted for 47.5 percent, 51.1 percent and 49.8 percent of its costs in 2011, 2012 and 2013, respectively.
A depreciating yuan also poses risk for the carrier, which has 502 million yuan in US dollar-denominated debts, it added.
The carrier announced the IPO plan after China’s civil aviation regulator yesterday approved the establishment of Jiuyuan Airlines, a new budget carrier under Juneyao.
With a registered capital of 600 million yuan, Jiuyuan, based at Guangzhou Baiyun International Airport in south China’s Guangdong Province, will mainly operate A320 aircraft for domestic passenger and cargo services, Juneyao said.
Jiuyuan, or “9 yuan” in Chinese, has said it will offer flight tickets priced at 9, 19, 29, 39 and 49 yuan.
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