July 15, Hainan Airlines Co. Ltd. (600221.SH), China's fourth-largest carrier, is planning to buy shares in Hungary's state-owned carrier, Malev Hungarian Airlines, according to Hong Kong media reports.
Should the deal come through, it will mark the first acquisition in Europe by a Chinese airline company.
The reports said Hainan Airlines Group, parent of Hainan Airlines, inked a strategic cooperation agreement with the Hungarian Capital Association for the acquisition deal during Chinese Premier Wen Jiabao’s state visit to the country in June.
Premier Wen paid a visit to 3 European nations between June 24 and June 28, starting with Hungary, where the premier said China would double bilateral trade volume and consider buying a certain amount of Hungarian bonds to help the nation out of the debt crisis.
Wen brought with him to Hungary a total of 12 contracts worth $1.8 billion, including the one with Hainan Airlines Group.
Earlier this week, Hainan Airlines announced its plan to sell up to 1.247 billion shares at no less than RMB 6.42 apiece, hoping to raise around RMB 8 billion.
The carrier's shares have been suspended from trading since Monday in Shanghai.
Proceeds from the sale will be used to repay outstanding bank loans of about RMB 6 billion, the company said in a statement to the Shanghai Stock Exchange.
This would be Hainan Airline's second private placement since the beginning of this year. The carrier managed to raise RMB 5 billion in the first one.
Hainan Airlines had total assets of RMB 72.3 billion and net assets of RMB 12.5 billion at the end of the first quarter of the year.
SOURCE: en.21cbh.com
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