Business Activities News
- CITIC planning Air China Cargo sale
Date: 22-Nov-2006 Sources: (Xinhua Online)
CITIC Pacific plans to sell its 25 percent stake in Air China Cargo, clearing the way for a merger between Air China Cargo and China Cargo Airlines, the biggest such deal in the nation's cargo sector.
The proposed link up would create a Chinese cargo conglomerate able to compete with the world's biggest carriers.
Rao Xinyu, board secretary of Air China Ltd, Air China Cargo's parent company, said that CITIC Pacific plans to sell its stake, 'but we haven't reached any agreement yet.'
Rao declined to reveal yesterday whether Air China would buy the stake from the Hong Kong-based company. CITIC Pacific was unavailable for comment.
By selling its stake in Hong Kong's Dragonair and reducing its shareholding in Cathay Pacific earlier this year, CITIC Pacific has indicated its intention to pull out of the aviation business.
Launched in 2003, Beijing-based Air China Cargo is 51 percent owned by Air China, with CITIC Pacific holding a 25 percent stake and Capital Airports Holding Co having a 24 percent shareholding.
Air China is widely expected to buy the shares from CITIC Pacific, which could make the cargo carrier's shareholding system less complicated and pave the way for its merger with China Cargo Airlines, analysts said.
'Air China should be the natural choice to take over the stake. The result is that Air China Cargo would have only two shareholders, and that could make the negotiation with China Cargo Airlines less complicated,' said Li Lei, an aviation analyst with CITIC China Securities.
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