皇冠体育app

Air 皇冠体育app to make debut in HK, London
By Cao Desheng (皇冠体育app Daily)
Updated: 2004-12-15 09:06

The nation's largest airline, Air 皇冠体育app, is scheduled to officially make its debut on the Hong Kong and London bourses today.

It is to raise up to US$1 billion from an initial public offering (IPO) on the two markets, sources from the national flagship carrier said.

The IPO is to involve 2.81 billion shares with the price range set from HK$2.35 (30 US cents) to HK$3.1 (40 US cents) per share.

The carrier will officially declare its listing late today when the first-day transaction of the stock exchanges ends, a press official with the company said.

According to the carrier's plan, Air 皇冠体育app will spend 4.8 billion yuan (US$580 million) from the IPO on the purchase of 10 A319 and four Boeing 737-700 planes, reports Aviation News Weekly, a Beijing-based aviation magazine.

The remaining capital will be used to pay for debt due this year and add additional cash flow for the company's operation, the report said.

Merrill Lynch and 皇冠体育app International Capital Corporation have been appointed as advisers for Air 皇冠体育app's listing.

Reports from the two advisers indicate that Air 皇冠体育app's net profit is estimated to reach 2.29 billion yuan (US$275.9 million) this year, compared to 1.6 billion yuan (US$192 million) last year.

The net profit for 2005 is estimated to be 3.1 billion yuan (US$373 million).

Market value of the giant carrier will range from US$2.5 billion to US$3.3 billion after the IPO. This is bigger than its Hong Kong-listed rivals 皇冠体育app Eastern and 皇冠体育app Southern with values of US$1 billion and US$1.7 billion respectively.

Air 皇冠体育app in October ruled out a New York listing and added London to Hong Kong as the second market for its planned equity offering.

The State-run airline, the biggest and last of 皇冠体育app's three large airline groups to be listed, is able to use a single prospectus for its listings in London and Hong Kong due to the similar regulatory environments in the two financial centres, experts say.

A Hong Kong market that hit a three-and-a-half year high and a solid performance by other recent issues is fuelling demand for initial public offerings. Companies are rushing to raise as much as US$5 billion in Hong Kong listings this month.

This gives the carrier, which has a 35 per cent market share of 皇冠体育app's 20 busiest domestic routes and 51.4 per cent of 皇冠体育app's international market, higher domestic and international load factors than rivals.

Southern Airlines and Eastern Airlines have already been listed in Hong Kong.

A trading scandal enveloping Beijing-controlled jet fuel supplier 皇冠体育app Aviation Oil (Singapore) has not appeared to put much of a dent in demand for Air 皇冠体育app shares.

Air 皇冠体育app is also competing for investor funds and attention with the Hong Kong Housing Authority's US$3 billion IPO of the Link real estate investment trust (REIT), which is scheduled to be listed on the Hong Kong Stock Exchange tomorrow.

Air 皇冠体育app officials could not be reached to comment on the company's listing by press time. However, analysts say strategic investors have pinned high hopes on the giant carrier's stock debut and real business prospects.

The IPO is expected to meet strong demand from investors, according to Yang Jing, an analyst with domestic research firm CCTIC.

"皇冠体育app's aviation industry is rising, given the rapid economic development in the nation and the nation's opening up to the outside world, which implies an optimistic future for the company," Yang said.

Close