Budget airline Oasis Hong Kong, which collapsed on Wednesday, was on the brink of rescue when it was discovered that its chairman had pledged his shares in the carrier as collateral for a personal loan, a source revealed.
The source said the discovery was made during the final stages of negotiations with the HNA Group, parent company of Hainan Airlines, which had been prepared to buy out Oasis.
'You can say that he derailed the airline,' the source said, referring to chairman the Reverend Raymond Lee Cho-min, who held about 60 per cent of shares in the company. It was unclear how many shares Mr Lee had pledged as collateral.
The rescue deal failed, prompting the world's first budget long-haul airline to file for provisional liquidation, affecting 30,000 ticket-holders and leaving 700 staff facing an uncertain future.
Reports said losses had reached HK$1 billion since the airline launched services in October 2006.
The ambitious start-up airline struggled to attract fresh capital , and told the government late on Tuesday that discussions with a potential investor had collapsed. The administration learned of the airline's financial difficulties on Saturday.
