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Citic Pacific to sell, Cathay to buy in
POSTED: 8:51 a.m. EDT, May 22,2007
Citic Pacific has been holding talks with Air China to sell its 25 per cent stake in a mainland air cargo joint venture to the carrier.
The joint venture is 51 per cent owned by Air China and Beijing Capital International Airport owns 24 per cent. The joint venture handles all of Air China's international and domestic freight and provides related ground handling services, said a report in The Standard, Hong Kong.
It said the sale of Citic Pacific's interest is intended to pave the way for Cathay Pacific to buy into the joint venture, after Air China struck a deal with Cathay to sell its indirectly held 43.29 per cent stake in Dragonair to the Hong Kong-based airline for HK$430 million (US$55 million) in cash and 289 million shares in September last year. This left Air China with a 10.16 per cent interest in Dragonair.
Citic Pacific was reported to have paid CNY550 million (US$71.6 million) for its 25 per cent stake in the joint venture in 2003, which handled 817,178 tonnes of air cargo in total in 2006, an increase of 15 per cent over the previous year. In spite of the volume growth, the joint venture suffered a loss of HK$1 million last year, compared to a gain of HK$44 million in 2005.
The business daily added that the planned asset disposal by Citic Pacific is in line with its strategy to concentrate on its core property and steel business in the next two years. |
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