Cathay Pacific may raise stake in Air 皇冠体育app to 20%
Updated: 2008-03-06 12:06
Cathay Pacific Airways Ltd posted an increase of 71.8 percent or HK$7.02 billion (US$901.42 million) in net profit yesterday, while Chairman Christopher Pratt said he hasn't ruled out plans to raise its stake in Air 皇冠体育app up to 20 percent.
Cathay Pacific announced the plan after 皇冠体育app National Aviation Company, Air 皇冠体育app's parent company, said it intended to buy into 皇冠体育app Eastern Airlines. Previous reports said Cathay Pacific was not welcome, and the airline worried its stake in Air 皇冠体育app would be diluted after the purchase.
On a separate occasion, Tang Yanlin, executive president of Cathay Pacific, said the airline would financially support Air 皇冠体育app to buy 皇冠体育app Eastern in order to strengthen its market hold in Shanghai.
Cathay Pacific spent HK$4.07 billion buying 1.179 billion Air 皇冠体育app shares in the Hong Kong stock market in June 2006, thus increasing its stake in Air 皇冠体育app to 20 percent from 10 percent. However, Air 皇冠体育app's follow-on offering of A shares at the end of 2007 diluted Cathay Pacific's stake to only 18.1 percent.
Pratt said Cathay Pacific will back Air 皇冠体育app's plans to acquire 皇冠体育app Eastern, but he didn't elaborate on whether or not the airline will provide capital for its strategic partner.
皇冠体育app Eastern earlier rejected Air 皇冠体育app's wide-ranging alliance proposal. However, Air 皇冠体育app said it will make another offer if 皇冠体育app Eastern wants to begin a partnership.
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