Air China seeks US$2.2 billion from private share offering to buy more Airbus jets, replenish capital
- Chinese flagship carrier says 4.36 billion additional shares, or 30 per cent of its existing share capital, will be issued to 35 designated investors
- A private offering could ensure that Air China secures enough capital to bolster its business amid market volatility, analyst says
The flagship carrier is aiming to sell 4.36 billion new shares, or 30 per cent of its existing capital, to 35 designated investors, according to a stock exchange filing on Tuesday. They include controlling shareholder China National Aviation Holding, which is expected to buy 5.5 billion yuan worth of the shares.
The carrier said 10.8 billion yuan of the proceeds would be used to buy 22 planes, including nine ARJ21 regional jets, four A320neo and nine A350 passenger planes from Airbus. The remaining 4.2 billion yuan would be used to replenish its working capital.
The targeted proceeds of 15 billion yuan translate into a per share price of 3.44 yuan for the share offering. Air China’s A shares closed at 9.67 yuan on Tuesday, unchanged from a day earlier.
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