CITIC Pacific may cut back stakes in CX&KA
Mar 30, 2006, 9:44 am
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CITIC Pacific may cut back stakes in CX&KA
March 30, 2006 | E-mail article link | m-Travel.com
Beijing-backed conglomerate CITIC Pacific will reduce its minority stake in Cathay Pacific Airways and Hong Kong Dragon Airlines if a merger between the territory’s two main carriers goes ahead.
This was indicated by the firm’s managing director Henry Fan, according to The Standard.
CITIC Pacific recently said it plans to focus on three core areas of business - property, steel and power in China - and will gradually divest non-core assets. As per the information available, CITIC Pacific owns a 25 percent stake in Hong Kong’s dominant carrier Cathay Pacific Airways Ltd. It also owns about 29 percent of Dragonair Airlines Ltd.
Industry analysts said the possible consolidation of the two carriers would create one of the world’s largest airlines by market value, and an Asian powerhouse that could feed an international customer base into greater China’s most comprehensive route network. According to the report, Karen Chan, a local aviation analyst for Credit Suisse, believes a consolidation will make economic sense and, in the current environment of industry liberalisation and high oil prices, the two airlines may either flourish together or risk stagnation.
The publication reported: “An industry source said CITIC has been trying to play a balancing role between the mainland’s China National Aviation Company, which owns a 43.29 percent stake in Dragonair, and Britain’s Swire Pacific, the major shareholder in Cathay, as well as a minority stakeholder in Dragonair.”
“It is a political issue,” a source, close to Air China, parent of CNAC, has been quoted as saying. He said that, at least in the short term, there are no plans for such a merger, but confirmed that CNAC would like to gain a majority stake in Dragonair.
Last year, media reports claimed Cathay was in talks to take control of Dragonair, and that its parent Swire Pacific would subsume Air China. In 2004, Cathay snapped up a 9.9 percent stake in Air China, but merger rumors were quickly denied by Air China, Swire and Cathay Pacific.
“In a complicated share structure - caused in part by the mainland’s desire to own a portion of the SAR’s flag carriers ahead of the handover - CITIC currently owns 28.5 percent of Dragonair, and has a 25.5 percent stake in Cathay. In turn, Cathay, which is 46.3 percent owned by Swire, holds a 22 percent stake in its smaller rival,” added the report.
Beijing-backed conglomerate CITIC Pacific will reduce its minority stake in Cathay Pacific Airways and Hong Kong Dragon Airlines if a merger between the territory’s two main carriers goes ahead.
This was indicated by the firm’s managing director Henry Fan, according to The Standard.
CITIC Pacific recently said it plans to focus on three core areas of business - property, steel and power in China - and will gradually divest non-core assets. As per the information available, CITIC Pacific owns a 25 percent stake in Hong Kong’s dominant carrier Cathay Pacific Airways Ltd. It also owns about 29 percent of Dragonair Airlines Ltd.
Industry analysts said the possible consolidation of the two carriers would create one of the world’s largest airlines by market value, and an Asian powerhouse that could feed an international customer base into greater China’s most comprehensive route network. According to the report, Karen Chan, a local aviation analyst for Credit Suisse, believes a consolidation will make economic sense and, in the current environment of industry liberalisation and high oil prices, the two airlines may either flourish together or risk stagnation.
The publication reported: “An industry source said CITIC has been trying to play a balancing role between the mainland’s China National Aviation Company, which owns a 43.29 percent stake in Dragonair, and Britain’s Swire Pacific, the major shareholder in Cathay, as well as a minority stakeholder in Dragonair.”
“It is a political issue,” a source, close to Air China, parent of CNAC, has been quoted as saying. He said that, at least in the short term, there are no plans for such a merger, but confirmed that CNAC would like to gain a majority stake in Dragonair.
Last year, media reports claimed Cathay was in talks to take control of Dragonair, and that its parent Swire Pacific would subsume Air China. In 2004, Cathay snapped up a 9.9 percent stake in Air China, but merger rumors were quickly denied by Air China, Swire and Cathay Pacific.
“In a complicated share structure - caused in part by the mainland’s desire to own a portion of the SAR’s flag carriers ahead of the handover - CITIC currently owns 28.5 percent of Dragonair, and has a 25.5 percent stake in Cathay. In turn, Cathay, which is 46.3 percent owned by Swire, holds a 22 percent stake in its smaller rival,” added the report.
Apr 11, 2006, 3:02 am
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Join Date: Jun 2003
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Here is a joint press release issued 10 April.
http://www.cathaypacific.com/intl/ab...137796,00.html
http://www.cathaypacific.com/intl/ab...137796,00.html
Apr 11, 2006, 11:34 am
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HK PRESS: Cathay Pacific Open To Selling Dragonair Stake
HONG KONG (Dow Jones)--Hong Kong's Cathay Pacific Airways Ltd. (0293.HK) prefers to sell its 17.8% stake in Hong Kong Dragon Airlines Ltd. in return for better time slots for its flights to Beijing and Shanghai, the South China Morning Post reported Wednesday, citing company sources.
Cathay may sell its stake to China National Aviation Company Ltd. (1110.HK), which already owns 43.3% of Dragonair, the report said, citing the sources.
Major shareholders of Cathay and Dragonair are negotiating a "realignment" of their interests in the carriers after conglomerate CITIC Pacific Ltd. (0267.HK) - which owns 28.5% of Dragonair and 26.7% of Cathay - said it plans to cut those stakes.
With Hong Kong and Chinese aviation authorities on the verge of reaching an open-skies agreement, the sources said Cathay doesn't see much strategic value in keeping its stake in the smaller airline, as Dragonair had privileged access to mainland China, flying to more than 15 cities in the country.
By comparison, Cathay flies passenger services to only two Chinese cities.
Conglomerate Swire Pacific Ltd. (0019.HK) is another major stakeholder in both airlines, holding 46.8% of Cathay, and 7.7% of Dragonair.
Newspaper Web site: http://www.scmp.com
Cathay may sell its stake to China National Aviation Company Ltd. (1110.HK), which already owns 43.3% of Dragonair, the report said, citing the sources.
Major shareholders of Cathay and Dragonair are negotiating a "realignment" of their interests in the carriers after conglomerate CITIC Pacific Ltd. (0267.HK) - which owns 28.5% of Dragonair and 26.7% of Cathay - said it plans to cut those stakes.
With Hong Kong and Chinese aviation authorities on the verge of reaching an open-skies agreement, the sources said Cathay doesn't see much strategic value in keeping its stake in the smaller airline, as Dragonair had privileged access to mainland China, flying to more than 15 cities in the country.
By comparison, Cathay flies passenger services to only two Chinese cities.
Conglomerate Swire Pacific Ltd. (0019.HK) is another major stakeholder in both airlines, holding 46.8% of Cathay, and 7.7% of Dragonair.
Newspaper Web site: http://www.scmp.com
Last edited by clansey1973; Apr 12, 2006 at 1:19 am