China Eastern Airlines Corp yesterday called on its shareholders to make independent judgments on the deal with Singapore Airlines amid concerns that rival Air China doesn't hold an objective attitude toward the deal.
Guo Jianming, an official for China National Aviation Holding Co, was quoted by Bloomberg News as saying yesterday that the group will vote against the HK$7.2 billion (US$916 million) deal and believe other minority shareholders will also vote against the deal.
However, the group's publicity head Chu Chengping told Shanghai Daily that the group followed its clarification statement published last month and hasn't revealed its decision on the deal.
China National, owner of 3.8 percent of China Eastern, also has a controlling stake in Air China Ltd.
China National said on Tuesday that the proposal price of the deal "does not reflect the fair value of China Eastern Airlines" and asked both companies to renew talks.
China Eastern thought the other way.
"The carrier is the H-share holder as well as a major rival of China Eastern, so we are concerned that its doubts on the Singapore deal lack independence and objectiveness and can't represent minority shareholders," the Shanghai-based airline said yesterday in an emailed statement, which appeared to be before China National Aviation's latest comment.
"We hope investors of China Eastern can eye long-term interests and help build the carrier into a top one," the statement said.
China Eastern has not received any alternative proposal from other carriers, the country's third-largest carrier said.
"The proposed price of HK$3.80 per share resulted from a long-term negotiation between China Eastern and Singapore Airlines, which is six times of the book value at the end of 2006, much higher than other deals of its kind," the company said.
Singapore Airlines and its parent Temasek Holdings Pte are seeking to buy 24 percent of China Eastern to expand into China's growing aviation market. Under the deal, China Eastern's parent company would also invest HK$4.2 billion to maintain its majority.
However, the deal needs approval from two-thirds of China Eastern's minority owners, including Air China's parent, when they meet on Tuesday to vote on the plan.
(Shanghai Daily January 4, 2008)
