China Eastern Airlines to raise up to $2.2b in share sale
A China Eastern Airlines plane takes off at an airport in Taiyuan, Shanxi province, April 5, 2013. REUTERS/Jon Woo
By Min Zhang, Meg Shen
China Eastern Airlines Corp plans to raise up to $2.23 billion in a share sale to expand its fleet and to replenish working capital, the company said in a filing to the Shanghai stock exchange on Tuesday.
China Eastern, the country's second largest carrier by passenger numbers, will use $1.78 billion proceeds from the share sale to fund the purchase of 18 airplanes, 15 flight simulators and 20 backup engines, it said in the filing.
The remaining $452.4 million will be used to boost its working capital, the filing added.
China Structural Reform Fund Corporation Ltd, approved by the State Council to support state-owned enterprises, will invest $301.6 million in the share sale, according to the filing.
Juneyao Airlines Co Ltd, and its controlling shareholder Juneyao Group, will spend a combined $1.93 billion in China Eastern's share sale, a separate filing to the Shanghai stock exchange showed.
The Shanghai-based Juneyao Airlines and the Group are expected to own more than 5 percent stake in China Eastern Airlines if they fulfil the upper limit of the proposed share subscriptions.