- Taxes on some wealthy French top 100 pct of income: paper
- North Korea fires short-range missiles for two days in a row |
- Israel warns against Russian arms supply to Syria
- Female hostage died from police bullet in New York standoff: official
- Winning ticket for $590.5 million Powerball lottery sold in Florida |
China Southern says to get 2 bln yuan cash injection
HONG KONG, June 11 |
HONG KONG, June 11 (Reuters) - China Southern Airlines , the country's top carrier by fleet size, said on Monday it would get a cash injection of up to 2 billion yuan ($314 million) fro m its state-owned parent, to help lower debt amid global economic uncertainty and high fuel costs.
The Guangzhou-based carrier would place 465.12 million new A shares at 4.3 yuan each with its parent, China Southern Air Holding Company, in exchange for the capital, it said in a statement to the Hong Kong stock exchange.
Chinese airlines have been expanding their fleets rapidly in the past few years to keep pace with high demand growth in the world's second largest aviation market, leaving carriers with high levels of debt.
With a fleet of more than 440 aircraft and 190 aircraft on order to be delivered between 2012 and 2016, China Southern had capital commitments of 65 billion yuan at the end of 2011, mostly related to the acquisition of aircraft and flight equipment.
The cash injection came after the chairman of its domestic rival China Eastern Airlines said it aimed to cut its debt-to-asset ratio to below 70 percent by the end of 2015 via fundraising in the markets and capital injections.
China Southern said it would use the money from the new shares to repay bank loans and for working capital.
Net debt was at 75.8 billion yuan at the end of 2011, taking its ratio of net debt to total equity to 201 percent last year compared with 211 percent in 2010.
Trading in shares of China Southern, which has been suspended since last Tuesday pending the statement, was expected to resume on Tu esday.
Priced at a discount of 8.12 percent to the stock's last close of 4.68 yuan per share in Shanghai on June 4, the new shares will be issued within six months after obtaining regulatory approvals, the company said.
In Hong Kong, its shares have fallen 11 percent this year, lagging a 2.8 percent rise on the blue-chip Hang Seng Index .
The injection came after two similar moves in 2009 and 2010, totalling a round 13 billion y uan, after the carrier suffered heavy losses in 2008 during the financial crisis.
Air China Ltd has said it plans to issue 1.05 billion yuan worth of new A shares to controlling shareholder, China National Aviation Holding Company, to reduce bank borrowing and for working capital. (Reporting by Alison Leung; Editing by David Cowell)
- Tweet this
- Share this
- Digg this