China Eastern Airlines is preparing for a shareholders' meeting
at which partnership with Singapore Airlines will be discussed.
China Eastern president and chairman Li Fenghua said yesterday
the company was still keen on the Singaporean carrier becoming a
partner.
On the sidelines of the Shanghai municipal committee of the
Chinese People's Political Consultative Conference (CPPCC) meeting, Li told China Daily the
Shanghai-based airline is continuing its cooperation with Singapore
Airlines on a commercial level and the two "are discussing their
partnership".
The remarks came after China Eastern accused a proposal by China
National Aviation Corp (CNAC), the parent of its biggest domestic
rival Air China, of counter-bidding for its shares, of being
"informal" and "not conforming to legal procedures".
It is the first time China Eastern has made clear its
determination to form a strategic partnership with Singaporean
investors since its proposal to sell a 24 percent stake to
Singapore Airlines and Temasek, the Singapore government's
investment arm, at HK$3.80 (49 cents) per share was rejected at a
shareholders' meeting on Jan 8 on the back of CNAC's
counteroffer.
Air China and Singapore Airlines declined to comment
yesterday.
"(Our partnership with) Singapore Airlines is sure," Li told
China Daily.
"Our cooperation on a business level is still going on, and we
are in talks.
"The next step is to seek a second chance (for the partnership
with Singaporean investors), with support from the State Council
and the State-owned Assets Supervision and Administration
Commission," Li said.
He declined to disclose whether Singapore Airlines is willing to
make an offer higher than that proposed by the CNAC or when the
second shareholders' meeting is scheduled.
China Eastern, the mainland's third-largest carrier, needs
financial resources and management expertise to enhance its
competitiveness.
However, its planned partnership with Singaporean investors -
talks have been going on for two years - was rejected by an
overwhelming majority of shareholders and raised questions whether
State-owned assets were being sold too cheaply.
Li said yesterday he had learned a lesson from the last
shareholders' meeting and how to adapt to running a business in the
commercial market.
"We were too simple-minded and relied too much on regular
practices," he said.
"We thought approval by the authorities would resolve all
difficulties. But in the capital market, administrative power does
not run through.”
"Shareholders don't trust you. They care only about share
prices," he said.
(China Daily January 24, 2008)
