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January 15, 2008 |
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CHINA EASTERN: Air China Wants “Comprehensive” Tie-Up China National Aviation Holding Co., the parent of Air China, will propose a "comprehensive" alliance with China Eastern Airlines Corp. that could include code-sharing, a joint cargo venture and an equity tie-up, Reuters reports, citing a CNAHC official who refused to be named. Reuters source also said that the alliance might also involve a share swap between Air China and China Eastern, instead of CNAC's mere purchase of a stake in China Eastern. According to the report, the official said CNAHC wants to work with China Eastern so that both of them can be stronger and more competitive. "Cooperation does not mean one side would be eaten up by the other. It could be a win-win situation," Reuters quotes the official as saying. Moreover, the official told Reuters that China Eastern would remain "an independent legal entity." As reported by the Troubled Company Reporter-Asia Pacific on Jan. 10, 2008, shareholders of China Eastern rejected a bid by Singapore Airlines to buy a minority stake after CNAHC pledged a higher offer. Specifically, CNAHC vowed to pay at least HK$5.00 a share, or at least 32% more than Singapore Airlines' and Temasek Holding Pte Ltd's HK$3.80 per share, or HK$7.2 billion (US$923 million) in aggregate, bid for a holding in China Eastern. The rejection, the TCRAP stated, paved the way for a possible counterbid for China Eastern by CNAHC. Headquartered in Shanghai, China, China Eastern Airlines Corporation Limited's -- http://www.ce-air.com -- principal activity is operation of domestic and international commercial air transportation. The Group also is involved in the common aircraft industry. Other activities include general aviation, air catering, advertisement, import and export, equipment manufacturing, real estate, hotel business, finance and training. The fleet includes more than 60 large and medium size airplanes, Airbus and Boeing mostly. Its operation centering from Shanghai to the whole People's Republic of China and linking to Asia, Europe, America and Australia. On April 28, 2006, Fitch Ratings downgraded China Eastern's foreign currency and local currency issuer default ratings to B+ from BB-. The outlook on the IDRs is stable. Xinhua Far East China Ratings gave the company a BB+ issuer credit rating. |
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