Hainan Airlines targets CNY8 billion in share sale
July 18, 2011 Category Members' News, Weekly
Hainan Airlines will raise CNY8 billion through a private share placement to help pay for a fleet expansion. The carrier will expand faster than rivals Air China, China Eastern Airlines and China Southern Airlines, with plans to increase it fleet 25% to 125 aircraft by the end of this year. Over the next three years, the number of aircraft will increase 20% each year. To finance its rapidly growing fleet – eight Boeing 787s will be delivered this year – Hainan Airlines has raised its total liability to CNY59.7 billion, including a CNY5 billion bond sold in May. Its debt-asset ratio rose to 81.5% in May. After the share sale, the debt-asset ratio of the company will drop to 71.36%. About CNY6 billion from the proceeds will be used to repay bank loans due between January and April next year. Grand China Airlines, which owns 41.6% of Hainan Airlines, is also considering selling shares to finance its fleet expansion. Hainan Air had 100 aircraft at the end of last year, with most of them B737-800s. The airline serves 90 domestic and international cities and operates 500 routes from nine bases, including Haikou, Beijing, Xian, Lanzhou and Dalian.
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