(Yicai Global) June 11 -- Hainan Airlines Holding plans to acquire CNY10 billion (USD1.6 billion) of HNA Group assets and raise up to CNY7 billion following a half-year suspension of share trading triggered by the restructuring of the parent company.
The deal involves a share issue to buy the assets and a fundraising round, Yicai Global has learned. The total value of the underlying assets was set at CNY10.5 billion. The company intends to issue about CNY3.36 billion shares to defray all associated costs.
Hainan Airlines will buy 60.78 percent of HNA Aviation Technik, HNA Group’s aircraft maintenance and engineering unit, 60.93 percent of HNA Aviation, and all of flight trainer Sky Plumage via a share issue. It will also buy a 60-percent stake in China Western Holdings and 29.72 percent of West Airlines, HNA Group’s low-cost airline, from a Tianjin-based investment firm. Hainan Airlines will control HNA Aviation and West Airlines.
Hainan Airlines will also raise funds in a private placement of A-shares with as many as 10 investors, among them Temasek Fullerton Alpha, the investment arm of Singapore’s sovereign wealth fund Temasek Holdings. Temasek signed a deal with HNA Group in April to explore cooperation in aviation, logistics and other fields. The other participants will include fund managers and securities firms.
The proceeds will fund seven projects such as HNA Technik Tianjin’s engine maintenance scheme, HNA Technik Xi'an maintenance project, Chongqing Sky Plumage aviation training center and West Airlines’ purchase of four aircraft.
Trading in shares of Hainan Airlines will not resume until after the Shanghai Stock Exchange has reviewed the relevant documents. HNA Group owns 3.53 percent of the carrier.
Editor: Ben Armour