China Eastern Airlines Co Ltd expects trading in its shares in
Hong Kong and Shanghai to resume before the end of this month as
the proposed sale of a minority stake to Singapore Airlines has won
the approval of four government agencies.
The four agencies are the State-owned Assets Supervision and
Administration Commission, Ministry of Commerce, National
Development and Reform Commission and the Civil Aviation
Administration of China.
China Eastern is still awaiting the final approval of the State
Council.
"The terms of the proposed sales are similar to what have been
widely reported in the media," Luo Zhuping, board secretary of
China Eastern Airlines, said yesterday.
According to the latest reports, Singapore Airlines and Temasek
Holdings Pte, the Singapore government's investment company, will
buy a combined stake of about 25 percent in China Eastern, China's
third-largest carrier, at around HK$3.73 per H share.
The company's A shares, listed in Shanghai, and H shares, listed
in Hong Kong, have been suspended from trading for nearly three
months since May 22. The A shares closed at 9.6 yuan and H shares
closed at HK$3.73 before trading was suspended.
"The top priority for us is to introduce new products from
Singapore Airlines to improve client services," said Luo. "There're
going to be significant changes to the management of the company,"
he said.
"There will be a great improvement in the company's
decision-making and financial management after the induction of
Singapore Airlines representatives into China Eastern's board of
directors," Luo said.
Injection of capital as a result of the stake sale is also
expected to improve the company's financial status.
Staff training exchanges between China Eastern Airlines and
Singapore Airlines have been conducted for a long time. More
frequent exchanges are expected after the share sale, Luo said.
Air China has increased its holdings of H shares in China
Eastern Airlines four times in just one month, and now accounts for
over 8 percent of China Eastern's H shares. The possibility of Air
China becomeing another major shareholder in China Eastern cannot
be ruled out, said Luo.
On July 23, China Eastern Airlines said in a statement to the
Shanghai Stock Exchange that it expects profits in the first half,
compared with a net loss of 1.46 billion yuan in the same period
last year.
"The aviation market in the next half of this year is expected
to do better than the first six months, due to strong economic
fundamentals, the increasing consumer demand, steady oil prices and
renminbi appreciation," said Luo.
(China Daily August 17, 2007)
