CHINA: SIA and EVA to buy shares in China Cargo Airlines
Singapore Airlines Cargo (SIA Cargo) and Concord Pacific - an EVA Airways affiliate company - are to each acquire a 16 per cent stake in Shanghaibased China Cargo Airlines following agreements reached in December.
February 1, 2011
By Donald Urquhart
Singapore Airlines Cargo (SIA Cargo) and Concord Pacific – an EVA Airways affiliate company – are to each acquire a 16 per cent stake in Shanghaibased China Cargo Airlines following agreements reached in December. The deals remain subject to a number of regulatory and other approvals. The aim is to reorganise China Cargo Airlines into a limited liability Chinese-foreign equity joint venture company. The much anticipated consolidation in China’s air cargo industry appears to be now in full swing. Currently, the cargo carrier is 70 per cent owned by China Eastern Airlines and 30 per cent by China Ocean Shipping Company (COSCO). Should the deal go ahead the ownership will change to 51 per cent for China Eastern who will put in Rmb 1.04 billion (US$158 million), 17 per cent for COSCO with a Rmb 348.5 million investment and 16 per cent each for Concord Pacific and SIA Cargo who will each kick in Rmb 328 million. In a Hong Kong Stock Exchange announcement, China Eastern said the investment in China Cargo Airlines would enable it to acquire the core air cargo transport business and related assets, aircraft, personnel, routes and contracts, of Shanghai Cargo Airlines and Great Wall Airlines. Great Wall Airlines is state-owned and run by Great Wall Industry Corporation which holds a 51 per cent share along with Singapore Airlines (25 per cent) and Dahlia Investments – a Singapore government-linked company (25 per cent). Shanghai Cargo Airlines is owned by Eva Air and Shanghai Airlines, a subsidiary of China Eastern.