July 10, 2018 / 1:58 PM / a month ago

China Eastern Airlines to raise up to $2.2 bln through a share sale

July 10 (Reuters) - China Eastern Airlines Corp plans to raise up to $2.23 billion in a share sale to expand its fleet and to replenish working capital, the company said in a filing to the Shanghai stock exchange on Tuesday.

China Eastern, the country’s second largest carrier by passenger numbers, will use $1.78 billion proceeds from the share sale to fund the purchase of 18 airplanes, 15 flight simulators and 20 backup engines, it said in the filing.

The remaining $452.4 million will be used to boost its working capital, the filing added.

China Structural Reform Fund Corporation Ltd, approved by the State Council to support state-owned enterprises, will invest $301.6 million in the share sale, according to the filing.

Juneyao Airlines Co Ltd, and its controlling shareholder Juneyao Group, will spend a combined $1.93 billion in China Eastern’s share sale, a separate filing to the Shanghai stock exchange showed.

The Shanghai-based Juneyao Airlines and the Group are expected to own more than 5 percent stake in China Eastern Airlines if they fulfil the upper limit of the proposed share subscriptions. ($1 = 6.6307 Chinese yuan renminbi) (Reporting by Min Zhang in Beijing and Meg Shen in Hong Kong, editing by Louise Heavens)

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