China's fast-growing Hainan Airlines is planning a new domestic share offering aimed at bringing in hundreds of millions of dollars to help it expand further.
Hainan, which is now the fourth-largest airline group in China, told the Shanghai Stock Exchange that it planned to seek shareholder approval for a new stock issue. State-run media report that up to $900 million could be raised, based on the trading value of the carrier's existing shares.
The carrier, 15%-owned by a firm controlled by US financier George Soros, says funds will be used to help it acquire the shares it does not already own in Changan, Shanxi and Xinhua Airlines. It acquired majority stakes in the three smaller carriers in 2000 and 2001 in moves aimed at helping it to better compete against dominant airline groups Air China, China Eastern and China Southern Airlines.
Hainan, which is headquartered in the southern island province of the same name, says funds raised from the planned share offering will also be used to reduce its debt, which analysts have expressed concern about, as well to expand its fleet.
The airline group mainly operates domestic flights but is seeking to expand its limited international network with more services within Asia as well as long-haul to the USA.
Source: Airline Business
