Hainan Airlines cuts share prices to raise RMB8b to pay off bank loan
Hainan Airlines (HU) has reduced the price of its additional share offerings from RMB6.42 per share in the Shanghai Stock Exchange to RMB4.84 per share to raise RMB8 billion ($1.28 billion) to pay off a bank loan of RMB6.08 billion and increase its cash flow.
The debt resulted from the rapid business expansion of its overseas merger and acquisitions (M&A) activities (ATW Daily News, July 15, 2011). HU’s bank debt has increased from RMB9 billion in 2008 to RMB14.8 billion at the end of the 2011 third quarter.
The Haikou-based carrier has slowed down its expansion pace because of the global economic downturn and its heavy financial burden. HU chairman Chen Feng said the airline would cut unnecessary investments to reduce operating expenses. As a result, the carrier, which was considering investing in financially troubled Malev Hungarian Airlines, has suspended negotiations.
whatsonsanya.com does not necessarily endorse their views or the accuracy of their content. For copyright infringement issues please contact email@example.com