jiml1126
Nov 23, 03, 4:57 pm
China Eastern Airlines (MU), one of the "Big 3" in China, is expected to sell some of its shares to foreign investors. The airline recorded a massive loss in the first 6-month of 2003, and facing huge debt.
Cathay Pacific, member of the Swire Group, is expected to make an offer to buy some MU shares.
According to Chinese media, China Eastern is now facing the biggest re-organization in its history. It has already bought 40% share of Wuhan Airlines and the operation has integrated. Now the carrier is trying to integrating China Yunnan Air and China Northwest Airlines. The former has 10-year of profitability. The latter, is a major challenge.
China Northwest Airlines' debt rate is 120% and a debt of RMB$2.5billion. It'll cost China Eastern Airlines RMB$10billion to reconstructure.
Several authorities has agreed not to ask China Northwest to pay their debt. And China Eastern received some subsidies.
The China Eastern Airlines Group has record RMB$1.4billion loss in the first 6-month, and RMB$1.19billion in the first 9-month (RMB$150million profit in 2002). Its debt rate has gone up from 76% to 85%. It only has RMB$1.2billion in cash left.
As a result, Cathay Pacific plans to buy some shares of China Eastern under Swire Group title. Talks between the 2 was halted due to SARS earlier.
Recent meeting was held on Nov 19. Cathay current has RMB$13.3billion in cash, as of April 2003, according to Standard and Poor.
If the deal is reached, it eases the threat to MU for direct competition against Cathay. This share buying deal may prevent CX to fly to Shanghai at any moment.
Cathay Pacific, member of the Swire Group, is expected to make an offer to buy some MU shares.
According to Chinese media, China Eastern is now facing the biggest re-organization in its history. It has already bought 40% share of Wuhan Airlines and the operation has integrated. Now the carrier is trying to integrating China Yunnan Air and China Northwest Airlines. The former has 10-year of profitability. The latter, is a major challenge.
China Northwest Airlines' debt rate is 120% and a debt of RMB$2.5billion. It'll cost China Eastern Airlines RMB$10billion to reconstructure.
Several authorities has agreed not to ask China Northwest to pay their debt. And China Eastern received some subsidies.
The China Eastern Airlines Group has record RMB$1.4billion loss in the first 6-month, and RMB$1.19billion in the first 9-month (RMB$150million profit in 2002). Its debt rate has gone up from 76% to 85%. It only has RMB$1.2billion in cash left.
As a result, Cathay Pacific plans to buy some shares of China Eastern under Swire Group title. Talks between the 2 was halted due to SARS earlier.
Recent meeting was held on Nov 19. Cathay current has RMB$13.3billion in cash, as of April 2003, according to Standard and Poor.
If the deal is reached, it eases the threat to MU for direct competition against Cathay. This share buying deal may prevent CX to fly to Shanghai at any moment.