(Yicai Global) Nov. 30 -- Shares of China's Hainan Airlines Holding surged after the troubled aviation company revealed a CNY50 billion (USD7.8 billion) plan to reduce its debts.

Hainan Airlines’ stock price [SHA: 600221] climbed as much as 4.9 percent to CNY1.92 (US 30 cents) intraday. The Shanghai-listed equity is at risk of being delisted so the daily limit is set at 5 percent.

The airline would issue 16.4 billion shares to double its total, the Haikou-based company said in a statement yesterday. No less than 4.4 billion units, or a bit more than a quarter of the addition, would target strategic investors. The price is CNY2.8 apiece, which would result in CNY12 billion of new funding.

The remainder of 12 billion shares will be used for debt-to-equity swaps involving the aviation company's creditors. The suggested price per unit is CNY3.18, which would work out a tally of more than CNY38 billion.

HNA Group, the parent company of Hainan Airlines, has begun restructuring after declaring itself bankrupt on Jan. 29, following years of aggressive expansion overseas. The financial and aviation conglomerate has CNY1.1 trillion (USD172.6 billion) of debts while its assets tally CNY500 billion (USD78.5 billion), according to the latest information.

Hainan Airlines is in the process of receiving a new controlling shareholder. In September, the company said chemicals and steel manufacturer Fangda Group Industrial has offered the highest price for it.

Editor: Emmi Laine, Xiao Yi