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Hainan Air to get $440 mln from govt, parent -paper

Thu May 21, 2009 7:59pm EDT

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SHANGHAI, May 22 (Reuters) - Hainan Airlines Co (600221.SS), China's fourth largest carrier, will receive a cash injection of 3 billion yuan ($440 million) from a local government and its parent group, the official China Securities Journal said on Friday.

In exchange for the funds, the airline will issue about 300 million new shares each to the Hainan provincial government and HNA Group at about 5 yuan per share, the newspaper said.

Hainan Air's debt ratio will be around 81 percent after the cash injection, it added.

Hainan Air's shares have been suspended from trading since it said on May 19 that it was planning a share placement deal.

Earlier in the year, the local government of Hainan provided an 800 million yuan loan to the HNA group.

China Eastern Airlines (600115.SS) (0670.HK) and China Southern Airlines (600029.SS) 1055.SZ have received cash aid from the Chinese government to cope with a downturn in air travel demand and volatile fuel costs. ($1=6.824 Yuan) (Reporting by Fang Yan and Edmund Klamann) (For summit blog: blogs.reuters.com/summits/)



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