Hainan Airlines lowers issuance price of its private placement
Hainan Airlines lowered the issuance price of its private placement from 6.42 yuan to 4.19 yuan per share, while maintaining the fundraising amount at eight billion yuan, reports China Business News, citing a company filing.
The amount of shares to be issued was increased from the 1.247 billion shares previously planned, to a maximum of 1.91 billion shares.
According to the filing, 76.05 percent of the funds raised will be used to repay bank loans.
It was reported that a total of 6.08 billion yuan worth of loans will come due this year, of which a 100 million yuan loan granted by Bank of Lanzhou needs to be repaid by May 6.
The interest expenses incurred by Hainan Airlines in 2009, 2010, and the first three quarters of 2011 topped two billion yuan.
Separately, the short-term borrowings of domestic airlines surged from nine billion yuan at end 2008, to 14.83 billion yuan at the end of the third quarter of 2011, an increase of more than 60 percent.
According to the airline, the continuous increases in the required reserve ratio and the benchmark interest rate led to the increase in finance cost.
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