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Macau carrier boosted by cash injection

AIR Macau Co will receive 431 million yuan (US$63 million) from its controlling shareholder Air China Ltd and other major shareholders to get through the economic downturn.

"Since the net asset value of Air Macau has become negative, Air Macau shareholders have to make a monetary contribution to replenish assets," Air China said in a statement to the Shanghai Stock Exchange yesterday.

The carrier has suffered losses in recent years and the situation worsened in 2008 with a negative net asset value of 104.2 million Hong Kong dollars (US$13.4 million).

Air China holds 51 percent of Air Macau via its subsidiary China National Aviation Corp (Macau) Co Ltd. The Macau government owns 5 percent of the carrier.

The cash injection plan includes reducing share capital to HK$971,000 on a pro-rata shareholding basis, establishing a non-distributable reserve and increasing share capital in Air Macau through an issuance of ordinary shares and non-voting redeemable preference shares. Orient Securities Co suggested investors buy shares of Air Macau.

Air Macau runs 11 passenger jets and two cargo jets, which mainly serve Taiwan routes. The carrier faced bigger challenges after the launch of regular direct flights between Taiwan and the Chinese mainland, said Kong Dong, chairman of Air China, in an earlier interview.

The regular flights allow passengers to fly directly between 27 terminals in major cities on the mainland and eight terminals in Taiwan, rather than making a transit stop in Hong Kong or Macau, which has reduced passenger traffic in the two cities.


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