Manila-based Asian Development Bank (ADB) is to make a more than $200 million foray into China’s airport sector in the form of a loan and equity buy-in deal with HNA Airport Holding Group.
The development bank, which is funded by its many member countries, says in a statement that the project, dubbed the Central and Western Airports Development Project, will comprise a $50 million equity investment in HNA Airport Holding (Group), which is a private company linked to Hainan Airlines. The company has stakes in airports in Hainan province as well as in other parts of China.
“The investment will assist Hainan Airport Group secure the confidence of international investors and attract more funds to continue expanding in the airport sector,” says ADB.
“While the company has already achieved significant success and has established a sound reputation in the industry, it is still at the onset of its planned expansion.”
In addition to the direct investment of $50 million, ADB says it will provide a 1.2 billion yuan ($165 million) loan. In addition, commercial banks will provide another $200 million loan.
“The project will support HNA Airport Group’s expansion and capital expenditure plan to privatise, rehabilitate, expand, upgrade and operate small- and medium-sized airports in the less developed central and western regions of the PRC [People’s Republic of China],” says ADB.
“HNA Airport Group participates in the privatisation of civil airports in the PRC, which will ultimately eliminate the need for subsidies now provided by local governments, freeing resources for other critical expenditures on items such as social benefit and health care.”
Source: flightglobal.com's sister premium news site Air Transport Intelligence news
Source: FlightGlobal.com
