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Cathay Pacific plans recapitalisation, government takes 6% stake in airline

Cathay Pacific plans recapitalisation, government takes 6% stake in airline

Old Jun 8, 2020, 7:57 pm
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Cathay Pacific plans recapitalisation, government takes 6% stake in airline

Update: Hong Kong government bails out Cathay Pacific.The recapitalisation plan comprises three tranches:

• Tranche A: Cathay Pacific will issue HK$19.5 billion in preference shares with detachable warrants to the Hong Kong Special Administrative Region (HKSAR) Government after requisite shareholders’ approval has been obtained.

• Tranche B: Cathay Pacific will launch a HK$11.7 billion rights issue of shares to existing shareholders after requisite shareholders’ approval has been obtained.

• Tranche C: the HKSAR Government will provide a HK$7.8 billion bridge loan facility to Cathay Pacific, available for drawdown immediately.

Press release from CX: https://news.cathaypacific.com/catha...tion-financing
Documents published on HKEX: https://www1.hkexnews.hk/listedco/li...0060900356.pdf
Government's letter to Legislative Council: https://www.legco.gov.hk/yr19-20/eng...b4-690-1-e.pdf
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Last edited by Reply1984; Jun 9, 2020 at 3:05 am
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Old Jun 8, 2020, 8:12 pm
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This is coming - CA will further own CX and Swire is dumping CX...

If the matters involve CX only, Swire and CA need not to be suspended...

So - Goodbye OW. *A, here we go...
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Old Jun 8, 2020, 8:55 pm
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Originally Posted by garykung
This is coming - CA will further own CX and Swire is dumping CX...

If the matters involve CX only, Swire and CA need not to be suspended...

So - Goodbye OW. *A, here we go...
On the assumption that daughter must follow the mother?
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Old Jun 8, 2020, 9:03 pm
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Originally Posted by CS300
On the assumption that daughter must follow the mother?
At least NX (Air Macau) did partially. So you can't say it is not possible.
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Old Jun 8, 2020, 9:07 pm
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Originally Posted by garykung
This is coming - CA will further own CX and Swire is dumping CX...

If the matters involve CX only, Swire and CA need not to be suspended...

So - Goodbye OW. *A, here we go...
My guess: it is more likely a capital injection plan. Cathay needs cash amid long-lasting aviation crisis, and it may issue shares to its shareholders, i.e. Swire and Air China. Swire selling CX to CA will not improve CX's cash position.
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Old Jun 8, 2020, 9:12 pm
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CX leaving OW would leave a big hole in OW.
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Old Jun 8, 2020, 9:15 pm
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Originally Posted by FlyPointyEnd
CX leaving OW would leave a big hole in OW.
But it would clear the way for China Southern to join.
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Old Jun 8, 2020, 9:17 pm
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Originally Posted by Xiaotung
But it would clear the way for China Southern to join.
That doesn't seem to be a very good trade.
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Old Jun 8, 2020, 9:19 pm
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Get ready to have seat backs upright at 1 hour prior to touchdown as soon as the drop from 11,000m begins!
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Old Jun 8, 2020, 9:24 pm
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Originally Posted by sincx
That doesn't seem to be a very good trade.
It depends on how you look at it. China Southern has a massive domestic network which would mean a huge deal to oneworld and the likes of AA and BA.

Not saying that's guaranteed to happen but it seems increasingly likely that this is what China has been plotting.
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Old Jun 8, 2020, 9:31 pm
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Anyone have an ear on the ground and hear any rumors? Any possible external shareholder to come in?
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Old Jun 8, 2020, 9:35 pm
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Originally Posted by Reply1984
My guess: it is more likely a capital injection plan. Cathay needs cash amid long-lasting aviation crisis, and it may issue shares to its shareholders, i.e. Swire and Air China. Swire selling CX to CA will not improve CX's cash position.
SCMP is reporting rumors about a new investor.

FWIW - Swire selling CX to CA actually can improve CX's cash position. Swire's selling could mean CX is majority owned by CA and becomes a SOE. Then China can "officiall" render any necessary assistance to CX.

(This is not everyone would like to see. However, it is a possibility.)
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Old Jun 8, 2020, 9:39 pm
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Originally Posted by garykung
SCMP is reporting rumors about a new investor.

FWIW - Swire selling CX to CA actually can improve CX's cash position. Swire's selling could mean CX is majority owned by CA and becomes a SOE. Then China can "officiall" render any necessary assistance to CX.

(This is not everyone would like to see. However, it is a possibility.)
Its a long standing fear of Hong Kongers that that could happen one day.
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Old Jun 8, 2020, 9:43 pm
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Originally Posted by garykung
SCMP is reporting rumors about a new investor.

FWIW - Swire selling CX to CA actually can improve CX's cash position. Swire's selling could mean CX is majority owned by CA and becomes a SOE. Then China can "officiall" render any necessary assistance to CX.

(This is not everyone would like to see. However, it is a possibility.)
Swire can do the same...Swire can also inject cash to CX.
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Old Jun 8, 2020, 9:43 pm
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Isn't there a 30% limit on Air China's shareholding or something like that?
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