Air China is pressing ahead with plans for its own initial public offering despite the postponement of the listing by the CAAC's commercial arm, China National Aviation Corporation.
Air China aims to shrug off its state control and partially privatise within two years. 'We'll float by 1999 at the latest and if possible next year - Air China needs to be a shareholding company, with stock sold on stock markets,' says an Air China source involved in the listing.
Encouraged by the successful IPOs of China Eastern Airlines and China Southern Airlines in February and July 1997 respectively, Air China intends to list in Hong Kong and New York. The airline is also examining the option of raising funds on the Beijing and Tokyo exchanges. (see page 28).
Under current regulations, Air China can list a maximum of 35 percent of its stock, watering down the CAAC's current 100 percent holding.
Air China has already set up a working team and is preparing accounts to be audited by accountants Deloitte & Touche as moves towards the listing, says Yang Bing, Air China's manager lease financing.
Funds will largely funds new aircraft purchases. Air China is already eyeing Airbus A320s, says a manufacturer source. The listing will also boost Air China's balance sheet and reduce long term debts of US$2.2 billion in 1996.
CNAC, which owns stakes in Air Macau and Hong Kong-based Dragonair, decided to postpone its IPO following the crash of the Hong Kong stock market. Red-chip stocks, representing China's leading companies, were badly hit by the fallout of the equity markets.
Lois Jones
Source: Airline Business
