Air China Ltd has no plans to acquire China Eastern Airlines Corp and its recent stake increase in the domestic rival doesn't reflect such a move, company secretary Huang Bin said yesterday.
Air China's parent recently increased its holding in China Eastern's H-shares, which triggered speculation that the country's flagship international carrier hasn't given up its plan to trump the deal between China Eastern and Singapore Airlines.
China National Aviation Holding Co raised its stake in China Eastern to 12.07 percent from 11.02 percent on November 29 at HK$7.585 a share for 4.28 million shares.
Huang said a Hong Kong-based investment arm under the parent company increased the shares on its own initiative.
China Eastern's board secretary, Luo Zhuping, said they have no worries about Air China's share increase and will operate normally.
Luo said in another report that Air China can hold as much as five percent of China Eastern's shares in the secondary market, which means another 50 million H-shares are available for it.
Singapore Airlines Ltd and its parent Temasek Holdings Pte signed an agreement last month to buy 24 percent of China Eastern Airlines Corp at HK$3.80 a share.
Under the terms of the deal, Singapore Airlines will spend HK$4.7 billion on a 16-percent stake in China Eastern and Temasek will buy an 8.3-percent stake for HK$2.5 billion.
China Eastern's parent plans to buy 1.1 billion new shares for HK$4.18 billion to maintain a majority stake.
Before the deal was made, Air China's parent considered pairing with Hong Kong's Cathay Pacific Airways to bid for a stake in China Eastern.
But Cathay Pacific Airways finally abandoned the plan.
The US$926-million Singapore deal still needs approval from China Eastern's minority shareholders.
(Shanghai Daily December 11, 2007)
