Paul Lewis/SINGAPORE
China Southern Airlines has filed an application to list on the New York stock exchange, following a similar float by China Eastern Airlines earlier in the year and Hainan Airlines' more recent successful public offering on the Shanghai bourse.
The Guangzhou-based carrier plans to sell a total of 1.03 billion H-shares (shares sold by the Chinese on overseas stock markets) internationally, the equivalent of nearly 32% of its total stock. Some 353.5 million shares will be sold in the USA in block bundles of 50, in the form of American Depository Shares (ADS).
China Southern expects the 7.07 million ADS units to each fetch between $24.20 and $30.65. It hopes to raise almost $600 million from the float, which will be underwritten by Goldman Sachs. The new capital will be used fund new equipment and offset debt.
Hong Kong-based New World Development, Hutchison Whampoa and its parent company, Cheung Kong, are reportedly collectively discussing acquiring almost a 10% stake in the carrier. The former two companies already have an interest in the China Southern/Lockheed Martin overhaul joint venture, Guangzhou Aircraft Maintenance Engineering.
China Eastern was the first mainland Chinese airline to list in early February, when the carrier floated 32% of its shareholding. Its offer of 1.4 billion shares on the Hong Kong and New York exchanges raised $250 million and was oversubscribed 22 times.
Domestic carrier Hainan Airlines in late June raised nearly $32 million from the sale of 71 million S-shares (sold in the domestic Chinese stock market), or 15% of its stock, to foreign investors on the Shanghai exchange. On the first day of trading, Hainan's share price climbed 14% on its initial ó47.
Following the listing, Hainan president Chen Feng says that it plans to expand into the air-cargo business with US financier George Soros, whose investment company American Aviation controls just over 21% of the airline.
Source: Flight International
