China Southern Airlines to receive $4 billion capital

 Thursday, July 25, 2019 

Favorite

China Southern Airlines will carry out an equity diversification plan that will involve the injection of 30 billion yuan ($4.36 billion) of capital from three investors. The Guangdong Hengjian Investment Holding Corporation, the Guangzhou Urban Construction Investment Group and the Shenzhen Penghang Equity Investment Fund will each add 10 billion yuan into the airline, as part of the country’s efforts to diversify ownership structures among state-owned firms.

 

This new move will significantly improve the company’s debt-to-asset ratio, generate funds for its growth and help modernize its decision-making mechanisms, the announcement said.

 

 

It will also use the funds to serve its main air transportation business, pay for construction related to China’s Belt and Road Initiative and support aviation development in cities in the southern province of Guangdong.

 

China Southern is one of 96 enterprises owned and administered directly by the central government. Its profits slumped nearly 50% last year as a result of rising fuel costs and a weak yuan currency.

It will help improve the corporate governance structure of the Guangdong-based airline company and nurture it into a leading world company, Hao said.

The reform will further boost Guangdong’s economic growth and expand the province’s opening-up, according to industry insiders.

 

 

 

China Southern Airlines said the new funds will be primarily applied to the air transport business, aiming to serve the construction of the China-proposed Belt and Road Initiative (BRI) and facilitate the development of the Guangdong-Hong Kong-Macao Greater Bay Area.

 

 

As one of China’s major airlines, the company said it will strive to grasp opportunities during the growth of the Greater Bay Area and provide world-class solutions to the local aviation industry.

 

 

 

Cooperating with local state-owned capital will be conducive for SOEs to form a complete industry chain and help them focus more on their primary business, Li Jin, chief researcher at the China Enterprise Research Institute, told the Global Times on Sunday.

 

 

 

The cooperation will inject growth impetus into local SOEs and further prompt them to pursue innovative and sustainable development in the future, Li told the Global Times, noting that “such trends will continue and intensify later this year.”

 

 

 

The Chinese civil aviation sector will deepen reform in the second half of 2019 to improve the efficiency of civil aviation resource allocation, lower the operating costs of domestic airlines and enhance their risk-resistance capacity, Chinese news site jiemian.com reported on Sunday, citing Feng Zhenglin, head of the Civil Aviation Administration of China.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

@Reuters

« Back to Page

Related Posts

PARTNERS

Subscribe to our Newsletter

I want to receive travel news and trade event update from Travel And Tour World. I have read Travel And Tour World's Privacy Notice.

Jul 01
Jul 05
Aug 04