Grand China Air, HNA to inject aviation assets into Hainan Airlines
Hainan Airlines (600221) said controlling shareholder, Grand China Air, and shareholder, Hainan Airlines Group, committed to inject aviation assets, including their stakes in Yunnan Lucky Air, Tianjin Airlines, Capital Airlines, Hongkong Airlines, into the company over the next 3-5 years, in order to eliminate horizontal competition, expand business scale, and enter the markets of second and third-tier cities, reports China Securities Journal, citing a company filing.
In the second half of last year, Hainan Airlines acquired aviation assets totaling 3.74 billion yuan from Hainan Airlines Group .
Hainan Airlines became one of the seven global five-star rated airlines in 2011.
Hainan Airlines recorded a 12.69 year-on-year drop in 2011 net profit to 2.631 billion yuan despite a 21.04 percent increase in revenue to 26.273 billion yuan.
The airline attributes the loss to higher operation cost and taxes, and a drop in non-operating revenue.
Hainan Airlines recently won approval from the China Securities Regulatory Commission (CSRC) to issue no more than 1.91 billion A shares at not less than 4.19 yuan per share in order to raise a maximum of eight billion yuan.
Of the total, 6.084 billion yuan will be used to repay bank loans, while the remainder will be used to boost working capital.
Hainan Airlines Group intends to develop into a large-scale comprehensive aviation services group, with air transportation as its main business, and aviation maintenance, business aviation, logistics as its other businesses.
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