Cathay Pacific plans recapitalisation, government takes 6% stake in airline
Jun 9, 2020, 8:42 pm
#61
Join Date: Aug 2016
Programs: CX Life Time,TG,
Posts: 265
I am pleased to learn that Cathay will survive but disappointed at learning little else. All I could glean from the announcement was that "Cathay Pacific management has been active and agile". (At least they were not proactive, a nonsense word created by a non English speaker.) And "... deferring new aircraft orders and deciding on the retirement of older aircraft...." Also that these active and agile folk would decide by the fourth quarter what Cathay future should be. That is until the next review. And have they not been working on this since early this year?
The rights issue is huge. The latest accounts are history. Why not give a proforma update, I hope that management gets that to aid them run the business. Also tell the poor shareholders what aircraft orders have been deferred and by how much, and what older aircraft are to be retired and when. The only comment I found was in a broker's note saying that 2020 deliveries have been deferred to 2021. I guess that must have either come from the Chairman's unreported briefing or was invented by the broker. Anyway, such information is not to be shared with the public. Too confidential.
The rights issue is huge. The latest accounts are history. Why not give a proforma update, I hope that management gets that to aid them run the business. Also tell the poor shareholders what aircraft orders have been deferred and by how much, and what older aircraft are to be retired and when. The only comment I found was in a broker's note saying that 2020 deliveries have been deferred to 2021. I guess that must have either come from the Chairman's unreported briefing or was invented by the broker. Anyway, such information is not to be shared with the public. Too confidential.
Jun 9, 2020, 9:25 pm
#62
Join Date: Apr 2008
Programs: Confirmed
Posts: 1,091
An ownership by CA isn't a bad thing. At the minimum, CX has better access to the Mainland market.
But this is definitely not a good deal. See below.
It will keep getting worse.
CX has been mismanaged for years (seriously, when an airline lost that much from hedging but made money on others, you know there must be something wrong). The new owner literally knows jack about businesses, as it practically fails in each instance.
Don't forget - the new owner is extremely biased (i.e. worse than CA) because it decides to save CX and leave HX untouched. Since CX becomes a SOE, their operations can be monitored by the new owner more closely.
But this is definitely not a good deal. See below.
It will keep getting worse.
CX has been mismanaged for years (seriously, when an airline lost that much from hedging but made money on others, you know there must be something wrong). The new owner literally knows jack about businesses, as it practically fails in each instance.
Don't forget - the new owner is extremely biased (i.e. worse than CA) because it decides to save CX and leave HX untouched. Since CX becomes a SOE, their operations can be monitored by the new owner more closely.
HX on the other hand, is controlled by HNA Group, which in turn indeed is a SOE, under management of the government of Hainan Province.
Jun 9, 2020, 9:38 pm
#63
Join Date: Apr 2017
Programs: Marco Polo Club, KF
Posts: 208
I am pleased to learn that Cathay will survive but disappointed at learning little else. All I could glean from the announcement was that "Cathay Pacific management has been active and agile". (At least they were not proactive, a nonsense word created by a non English speaker.) And "... deferring new aircraft orders and deciding on the retirement of older aircraft...." Also that these active and agile folk would decide by the fourth quarter what Cathay future should be. That is until the next review. And have they not been working on this since early this year?
The rights issue is huge. The latest accounts are history. Why not give a proforma update, I hope that management gets that to aid them run the business. Also tell the poor shareholders what aircraft orders have been deferred and by how much, and what older aircraft are to be retired and when. The only comment I found was in a broker's note saying that 2020 deliveries have been deferred to 2021. I guess that must have either come from the Chairman's unreported briefing or was invented by the broker. Anyway, such information is not to be shared with the public. Too confidential.
The rights issue is huge. The latest accounts are history. Why not give a proforma update, I hope that management gets that to aid them run the business. Also tell the poor shareholders what aircraft orders have been deferred and by how much, and what older aircraft are to be retired and when. The only comment I found was in a broker's note saying that 2020 deliveries have been deferred to 2021. I guess that must have either come from the Chairman's unreported briefing or was invented by the broker. Anyway, such information is not to be shared with the public. Too confidential.
Jun 9, 2020, 9:38 pm
#64
Join Date: Sep 2018
Programs: Alaska
Posts: 2,188
Air China Group is 100% SOE. Air China Ltd is partially owned public company - OK, let's say it's a full SOE. CX's biggest shareholder is Swire who owns 45% and controls 54% voting rights. On CX board there are 7 Swire related directors and 5 CA ones. How does CX become a SOE? Unless Swire is run by the party.
HX on the other hand, is controlled by HNA Group, which in turn indeed is a SOE, under management of the government of Hainan Province.
HX on the other hand, is controlled by HNA Group, which in turn indeed is a SOE, under management of the government of Hainan Province.
HNA Group is not SOE. It is private-owned. HU, on the other hand, is majority-owned by Hainan Provincial government, but under management of HNA Group, a minority shareholder, not Hainan Provincial government.
Jun 9, 2020, 10:20 pm
#65
Join Date: Jul 2014
Location: SFO/HKG
Programs: ex-UA 1K, AA EXP, Hilton Diamond
Posts: 535
Also, the agreement with the HK gov't stipulates Swire must remain a controlling shareholder otherwise all funds will need to be immediately repaid so fair to conclude there are no plans for Swire to exit from CX either.
Jun 9, 2020, 11:08 pm
#66
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It has been for a while...but things have been more clear since last year...
What if CA becomes the majority owner?
What if CA becomes the majority owner?
Jun 10, 2020, 12:26 am
#67
Join Date: Jan 2011
Posts: 2,345
I don't want to get into this topic again here. But it is painfully clear to anyone who has done any sort of business dealing with China that when it matters, every Chinese company is an SOE.
Jun 10, 2020, 1:40 am
#68
Join Date: Sep 2018
Programs: Alaska
Posts: 2,188
underlying those bureaucracy, there are many enterprising spirits.
Jun 10, 2020, 7:02 am
#69
Join Date: Apr 2008
Programs: Confirmed
Posts: 1,091
Jun 10, 2020, 11:41 am
#71
Join Date: Sep 2005
Location: TPE / HSZ
Programs: CX GO (=SPH), IHG Diamond Amb, Hertz 5*, Accor, Hilton, National
Posts: 6,437
No one knows what will happen in the future, but based on what is happening now, this is not the case.
Based on https://www1.hkexnews.hk/listedco/li...0060900354.pdf
Swire Pacific has also undertaken to Aviation 2020 that, until the date of issue of the preference shares to be issued by Cathay Pacific and so long thereafter as Aviation 2020 remains the holder of such preference shares or any amount of the bridge loan facility to be made available to Cathay Pacific is outstanding, Swire Pacific will remain a controlling shareholder (as defined in the Listing Rules) of Cathay Pacific and will ensure that Cathay Pacific will not do any act or thing that would result in Swire Pacific ceasing to be such a controlling shareholder of Cathay Pacific.
Jun 10, 2020, 11:44 am
#72
Join Date: Sep 2005
Location: TPE / HSZ
Programs: CX GO (=SPH), IHG Diamond Amb, Hertz 5*, Accor, Hilton, National
Posts: 6,437
Air China Group is 100% SOE. Air China Ltd is partially owned public company - OK, let's say it's a full SOE. CX's biggest shareholder is Swire who owns 45% and controls 54% voting rights. On CX board there are 7 Swire related directors and 5 CA ones. How does CX become a SOE? Unless Swire is run by the party.
HX on the other hand, is controlled by HNA Group, which in turn indeed is a SOE, under management of the government of Hainan Province.
HX on the other hand, is controlled by HNA Group, which in turn indeed is a SOE, under management of the government of Hainan Province.
Jun 10, 2020, 2:12 pm
#73
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Jun 10, 2020, 9:10 pm
#74
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Join Date: Jul 2006
Location: Hong Kong, France
Programs: FB , BA Gold
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Like for other airlines, this combination of loans and equity will allow CX to survive the next few months. SIA announced it much earlier (late March) and it was significantly bigger.
But a drastic and dynamic contraction plan has to be implemented for the next few years and beyond.
This is a challenge facing all airlines.and several have already hinted at some strategy.
I hope that CX can now move to structuring such a plan which is likely to be quite painful. Unless CX moves quickly and decisively, the current band aid will need to be replaced by another one, and I don't see the HK government ready for it.
But a drastic and dynamic contraction plan has to be implemented for the next few years and beyond.
This is a challenge facing all airlines.and several have already hinted at some strategy.
I hope that CX can now move to structuring such a plan which is likely to be quite painful. Unless CX moves quickly and decisively, the current band aid will need to be replaced by another one, and I don't see the HK government ready for it.
Jun 10, 2020, 9:23 pm
#75
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