Hong Kong Government bailout for Cathay Pacific avoids Air China takeover

更新日期:6月 19

The Hong Kong government’s HK$29 billion (US$3.8 billion) bailout of Cathay Pacific gives needed cash without major shareholder Air China taking over the airline in a move neither carrier or government seems prepared for in the current sensitive political and financial environment.

“The government’s investment signifies our determination in reinforcing our international aviation hub status,” Financial Secretary Paul Chan said in a press conference on Tuesday afternoon.

The support will “enable the much needed post-COVID-19 revival of the economy.”

Cathay’s HK$39 billion (US$5 billion) recapitalisation is mostly in the form of new equity and is led by the Hong Kong government. Its future ownership structure will not significantly change as the Hong Kong government gains a 6.1% stake.

“It is not the intention of the government to hold this investment long-term,” Chan said. “It is not our intention to become a long-term shareholder of Cathay Pacific.”

Existing shareholders retain balance but with marginal dilution after the rights issue. “The existing shareholders need to contribute funding to the group,” Chan said.

Swire Pacific’s holding in Cathay will decrease from 45% to 42.3%, Air China from 29.9% to 28.2%, and Qatar Airways from 9.9% to 9.4%. Swire and Air China combined will still own over 70%.

The city will not have voting members on Cathay’s board but will have two observer seats. Qatar Airways, which will have a larger stake than the Hong Kong government, has not had a board representative.

#aviation #travel #flight #cathay #cx #cathaypacific #swire #airlines

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