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China Eastern receives approval for stake sale to SIA
2007-08-28
The Chinese government has given the final approval for China Eastern Airlines to sell a stake to Singapore Airlines (SIA), state media said Tuesday. "China Eastern has received approval from government agencies for the purchase of its stake by SIA and is discussing with SIA about the final details," the Shanghai Securities News reported, citing unnamed sources. The report said an announcement would likely be made at the weekend. The South China Morning Post in Hong Kong also reported that the government had given the green light for the sale. Analysts have said the deal would provide a much-needed lifeline to loss-making China Eastern and give the Singaporean carrier a key foothold in China, home to one of the world's biggest and fastest growing airline markets. No details about the terms of the deal were provided in the Shanghai Securities News report. But Chinese state press reported in early June that China Eastern's board had approved a plan to sell a combined 24 percent stake to SIA and Singapore's state-linked investment company Temasek Holdings through a share offer. The Caijing magazine reported that SIA would buy 1.24 billion new Hong Kong listed H-shares, or a 15.8 percent stake of China Eastern, for 4.7 billion Hong Kong dollars (610 million dollars). Temasek would pay about 640 million Hong Kong dollars for an 8.2 percent stake, the report said. China-based spokespeople for China Eastern and Singapore Airlines declined to comment when contacted by AFP on Tuesday.
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