Shanghai Air denies gov't cash injection report

SHANGHAI Dec 8 (Reuters) - Shanghai Airlines Co 600591.SS said on Monday its shareholders and the Shanghai government had taken no action to inject cash into the carrier, refuting a local newspaper report.

The 21th Century Business Herald had reported that the municipal government was considering injecting cash into the carrier to help ease its operational and financial difficulties.

But Shanghai Air denied such a move after consultations with its shareholders.

In a statement, the carrier also said it had not held discussions with any potential investors on other issues that might affect its share price.

Last week, the carrier's shares, traded in Shanghai, rose 8.38 percent to 4.27 yuan ($0.621) by Dec 4 when it last traded, amid speculation of a cash injection and talk that government officials were moving to broker a merger of the carrier and its bigger cross-town rival China Eastern Airlines (600115.SS). ($1=6.874 Yuan) (Reporting by Fang Yan; Editing by Jonathan Hopfner)