Aviation News
- Hainan Air plans jet sale-leaseback
Date: 15-Dec-2006 Sources: (Shenzhen Daily)
HAINAN Airlines Co. Ltd., partly owned by U.S. billionaire financier George Soros, said Thursday it plans to sell four jets for US$220 million and lease them back in order to cut debts.
The Shanghai-listed company, the mainland's fourth-largest airline, would sell four B737-800 jets to sister firm Changjiang Leasing Co., and would lease them back at a monthly fee of US$630,000-US$770,000 each for six years, it said in a statement.
'This is aimed at reducing the company's liabilities and enhancing its financial structure,'a company statement said.
One of the four jets will be delivered in 2008 and the other three will be delivered in 2009, the statement said.
For the same reason, Hainan Airlines plans to lease its five Domier 328 jets and 230 crew working at the loss-making division, including 60 pilots, to another sister company, the airline said.
Hainan Airlines will receive a monthly rental of 1.22 million yuan (US$155,900) for each of the D328 planes, it said, adding that it will be paid 150 million yuan for the staff transfer.
The plans, proposed by the company's board of directors, require approval from the company's shareholders, who will meet Dec. 29 to vote on the proposals.
The A shares of the airlines have gained 47 percent in the past year but were down 8.4 percent in the past three months.
The airline raised US$700 million through a share sale in June to finance a major fleet expansion that will help it challenge bigger domestic rivals.
The private placement gave control of Hainan Airlines to Grand China Airlines Holding Co., a provincial government investment arm which replaced Soros as Hainan's biggest shareholder.
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