(Yicai Global) Nov. 11 -- Air China Cargo, the freight specialist under China’s flagship airline Air China, has welcomed in new shareholders as it concludes a 31 percent increase in share capital as part of its mixed-ownership reform which started in 2018.

This will bring in CNY4.9 billion (USD735.2 million) in fresh investment, according to a statement issued by new shareholder Shenzhen International Holdings, part of Shenzhen’s State-owned Assets Supervision and Administration Commission, on Nov. 9.

Mixed-ownership reform refers to the injection of private capital into stagnating government-controlled businesses to boost competitiveness. In Beijing-based Air China Cargo’s case, existing shareholders have agreed to hike the carrier’s registered capital by CNY3.3 billion (USD498 million) to CNY10.69 billion to make room for new investors.

The new stakeholders include Shenzhen International, Cainiao Smart Logistics Network which is the logistics arm of e-commerce giant Alibaba Group Holding, Guogai Shuangbai Development Fund set up by the state-owned investment fund China Reform Holdings Corp and Air China Cargo’s employee stock ownership plan.

As a result, existing shareholders AVIC Capital, which is a subsidiary of Air China, Cathay Pacific China Cargo and financial services firm Fine Star Enterprises will have their stakes diluted to 45 percent from 65.2 percent, 12.2 percent from 17.7 percent and 11.8 percent from 17 percent respectively.

Shenzhen International will become the fourth-largest share holder by paying CNY1.57 billion (USD23.7) for a 10 percent stake. The holdings of the other newcomers were not disclosed.

Air China Cargo logged net profit of CNY1.9 billion (USD287 million) in the first seven months on revenue of CNY10.5 billion. The firm, which has assets of CNY15.7 billion (USD2.4 billion), was set up in November 2003 and operates in 187 cities in 43 countries around the world.

Editors: Liao Shumin, Kim Taylor