China Eastern Airlines and China Southern Airlines are each planning to sell additional shares on the domestic Shanghai exchange, following their successful initial public offers in Hong Kong and New York.
Shanghai-based China Eastern plans to sell shares representing around 6.5% of the airline to Chinese investors, raising around $135 million on current prices. The flotations in Hong Kong and New York brought foreign shareholding to the maximum ceiling of 35% under Chinese law.
China Southern has also been given leave by China's Securities Regulatory Commission to go ahead with a domestic share sale by the end of October, following its international listings in July. It is also at the 35%foreign-ownership limit after underwriter Goldman Sachs took an extra 3%stake.
The share prices of both airlines have risen steadily since the flotations. Airline analysts suggest that the issue of new shares in China will allow both airlines to make further sales to foreign investors without breaching the 35%limits.
Source: Flight International
