Chinese regulators have approved Singapore Airlines to buy stake
of China Eastern and the final deal is due to be made public on
Sunday.
Details of the cooperation is under talk between the two
aircraft companies and China Eastern will announce a specific
proposal in its press conference held this Sunday, the Shanghai
Securities News reported on Tuesday.
Li Fenghua, chairman of China Eastern, said earlier that
Singapore Airlines would not get more than 25 percent of his
company, which is the maximum allowed by Chinese law.
For China Eastern, the deal means a major cash injection that
will improve the quality of its assets.
Singapore Airlines will also bring to China Eastern managerial
expertise and in return get access to China's rapidly growing
mainland aviation market.
China Eastern said the company's profit totaled 263 million yuan
(US$ 34.6 million) in the first six months after suffering losses
for two consecutive years, on the back of better performance and
income generated from the rising yuan.
It carried 18.33 million passengers and 422,800 tons of cargo in
the first half, up 9.17 percent and 0.81 percent respectively.
As one of the three largest carriers in China along with Air
China and China Southern Airlines, China Eastern Airlines
registered losses of 2.78 billion yuan in 2006 and 510.86 million
yuan in the first quarter of 2007. Trading of the company's stocks
has been suspended since May 22 for the announcement. Its stock
price last closed at 9.6 yuan.
(Xinhua News Agency August 28 2007)
