Air China to 'seriously consider' parent's China Eastern bid
Air China has said it would "seriously consider" its parent company's bid to form a strategic alliance with China Eastern Airlines.
By Agencies |
HONG KONG: Air China on Tuesday said it would "seriously consider" the plan by its parent company to form a strategic alliance with China Eastern Airlines, as shares in both companies tumbled in Hong Kong.
Air China "will seriously consider and actively respond to the proposal (by China National Aviation Corp (CNAC) in respect of the business cooperation between the company and China Eastern," it said in a statement to the Hong Kong stock exchange.
Last week, CNAC formally submitted a proposal to the mainland's third-biggest airline to create an aviation hub operation system in Shanghai and to integrate the cargo businesses of Air China and China Eastern.
CNAC also wants to partner with China Eastern Air Holdings Company, China Eastern's parent, to jointly subscribe for nearly 3 billion new shares in China Eastern at 5.00 Hong Kong dollars each or higher.
China Eastern will receive at least 14.9 billion Hong Kong dollars ($1.9 billion) in cash under CNAC's proposal.
Air China said Tuesday it has yet to decide on its parent's offer to China Eastern.
Shares in both China Eastern and Air China tumbled in Hong Kong Tuesday, amid wider market turmoil across Asia.
China Eastern fell nearly 11.6 percent despite a company announcement that it expects to return to profit for 2007, as investors focused on uncertainty of finding a strategic partner for the carrier.
Air China lost a further 19.2 percent after plunging 15 percent Monday. The airline said it is yet to decide on a proposal put forward by its parent China National Aviation Corp for a tie-up with CEA.
China Eastern Airlines was down 0.78 dollars at 5.95, while Air China was down 1.61 dollars at 6.77.
Singapore Airlines and Temasek Holdings, Singapore's state-linked investment firm, signed a preliminary deal in September to take a 24-percent stake in China Eastern for 923 million US dollars.
But minority shareholders rejected the bid, worth 3.80 Hong Kong dollars per share, earlier this month after CNAC indicated they would make a higher offer.
Air China "will seriously consider and actively respond to the proposal (by China National Aviation Corp (CNAC) in respect of the business cooperation between the company and China Eastern," it said in a statement to the Hong Kong stock exchange.
Last week, CNAC formally submitted a proposal to the mainland's third-biggest airline to create an aviation hub operation system in Shanghai and to integrate the cargo businesses of Air China and China Eastern.
CNAC also wants to partner with China Eastern Air Holdings Company, China Eastern's parent, to jointly subscribe for nearly 3 billion new shares in China Eastern at 5.00 Hong Kong dollars each or higher.
China Eastern will receive at least 14.9 billion Hong Kong dollars ($1.9 billion) in cash under CNAC's proposal.
Air China said Tuesday it has yet to decide on its parent's offer to China Eastern.
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Shares in both China Eastern and Air China tumbled in Hong Kong Tuesday, amid wider market turmoil across Asia.
China Eastern fell nearly 11.6 percent despite a company announcement that it expects to return to profit for 2007, as investors focused on uncertainty of finding a strategic partner for the carrier.
Air China lost a further 19.2 percent after plunging 15 percent Monday. The airline said it is yet to decide on a proposal put forward by its parent China National Aviation Corp for a tie-up with CEA.
China Eastern Airlines was down 0.78 dollars at 5.95, while Air China was down 1.61 dollars at 6.77.
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Singapore Airlines and Temasek Holdings, Singapore's state-linked investment firm, signed a preliminary deal in September to take a 24-percent stake in China Eastern for 923 million US dollars.
But minority shareholders rejected the bid, worth 3.80 Hong Kong dollars per share, earlier this month after CNAC indicated they would make a higher offer.
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