BEIJING May 6 Juneyao Airlines, a small
privately owned carrier, said it aims to raise 1.9 billion yuan
($304 million)in an initial public offering in Shanghai to fund
its fleet expansion.
The Shanghai-based 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 ahead of China's labor day holiday.
Proceeds of the listing would fund the purchase of seven
Airbus Group NV A320 jets and back-up engines, it said.
Founded in 2006, Juneyao Air, 88 percent owned by the
namesake group company, has been profitable in the past three
years, with net income rising 34 percent to 336.5 million yuan
During the three-year period, it also received 273.5 million
yuan in subsidies from local governments desperate to attract
In the prospectus, Juneyao Air 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
A depreciating yuan also poses risk for the carrier, which
has 502 million yuan of in dollar-denominated debts, it added.
Spring Airlines Co Ltd, China's first and biggest budget
carrier, has also applied for a $400 million IPO in Shanghai to
fund its fleet expansion.
($1 = 6.2455 Chinese yuan)
(Reporting by Fang Yan and Matthew Miller in BEIJING; Editing
by Matt Driskill)