Air China to issue 400b shares to fund more aircraft
(Xinhua)
Updated: 2007-11-02 08:55
China's national flag carrier Air China announced Thursday plans to issue up to 400 million A-shares - 5.1 percent of its total - to raise funds to purchase aircraft and replenish the company's working capital.
The company intends to utilize the proceeds from the offering to finance the acquisition of 15 Boeing 787 aircraft, 24 Airbus 320 series aircraft and 15 Boeing 737 series aircraft in an effort to increase the airline's transport capacity. It will also spend up to 1.5 billion yuan (US$200.5 million) to supplement its working capital.
As the Olympic Games draw near, China's civil aviation industry has embraced the opportunity to expand its business. In the first three quarters of this year, the country's airlines garnered 13.72 billion yuan in combined profits, more than doubling the year-earlier level of 4.89 billion yuan.
Earlier this week, the third runway at the Beijing Capital International Airport became operational, aimed at easing traffic pressure at the country's busiest airport.
The airport handles 1,100 flights every day, a figure that will probably rise to 1,500 to 1,600 and peak at 1,900 during the Olympics next year, according to figures revealed by the airport.
It is part of an airport expansion project that includes a new terminal building, 100 new aprons, a cargo zone and auxiliary facilities before the Olympics.
China Southern Airlines, a major competitor of Air China, and other large airlines have set up their Beijing branches in a bid to get a bigger share of the lucrative market.
The Investor Relations Office of Air China told Xinhua that the company is awaiting approval of the new share offering from its shareholders and relevant authorities.
The company has not decided the main underwriters of this issue, said the office.
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