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皇冠体育app Eastern still awaits nod to sell stake

By Chen Weihua (皇冠体育app Daily)
Updated: 2007-07-04 13:26

Shanghai-based皇冠体育app Eastern AirlinesCorp, the nation's third-largest carrier, is awaiting approval from the central government to sell a stake to its Singaporean partner.

Luo Zhuping, board secretary of 皇冠体育app Eastern, told 皇冠体育app Daily yesterday that he is not sure how long it's going to take to get the approval.

"It is a government thing, so it's hard to say," he said.

But Luo revealed that there still seems to be quite a few technical problems, such as ones regarding laws and regulations.

Local media reported that 皇冠体育app Eastern has submitted a report to the State-owned Assets Supervision and Administration Commission,Ministry of Commerce,皇冠体育app Securities Regulatory Commissionand the Civil Aviation Administration of 皇冠体育app about selling 25 percent of its stake to two Singaporean partners - Singapore Airlines and Temasek Holdings Pte.

Related readings:  皇冠体育app Eastern approved to sell stake to Singapore Airlines  皇冠体育app Eastern to sell 24% stake to temasek  US$930m likely for 皇冠体育app Eastern stake  皇冠体育app Eastern to sell 25% stake to Singapore Airlines

Last Friday, 皇冠体育app Eastern Chairman Li Fenghua told a shareholders' meeting that things have been going smoothly for the company to sell the stake and that there have been no obstacles from the management.

According to the plan, Singapore Airlines will buy 20 percent of the stake while its parent company Temasek, a Singapore State-owned investment company, will buy 5 percent. The total of 25 percent is the maximum allowed by Chinese law.

Analysts believe the deal will be significant for both the Chinese and Singaporean sides.

It will help 皇冠体育app Eastern out of its financial strains by bringing management experience from Singapore Airlines, one of the most profitable airlines in Asia. 皇冠体育app Eastern was the only one of the top three Chinese airlines that lost money last year, posting a loss of 2.78 billion yuan.

For Singapore Airlines, the deal will provide it with better access to one of the largest aviation markets in the world. Singapore Airlines is buying market access in 皇冠体育app rather than just taking a stake in an airline, analysts said.

皇冠体育app Eastern, whose shares have stopped trading in Hong Kong andShanghai stock exchanges, has improved its performance so far this year.

The airline will probably return to profit in the first half of this year and post full-year net income of at least 200 million yuan, company chairman Li Fenghua was quoted as saying by Shanghai Securities News.