JuneYao Group, JuneYao Airlines Snap Up 10% China Eastern Shares
Chen Shanshan
/SOURCE : Yicai
JuneYao Group, JuneYao Airlines Snap Up 10% China Eastern Shares

(Yicai Global) July 11 -- After bringing in Delta Air Lines and Ctrip.Com as strategic investors over the last two years, Shanghai-based China Eastern Airlines is about to embrace its private capital shareholder and strategic partner -- Shanghai-based JuneYao Group and its affiliate JuneYao Airlines.

Proceeds from the A-share sale will be used to purchase six Boeing aircraft, 12 Airbuses, 15 flight simulators and 20 spare engines. Money raised from an H-share issuance will be used as supplementary working capital.

Shanghai-based China Eastern plans to raise up to CNY11.8 billion (USD1.77 billion). Private Shanghai-based JuneYao Airlines will subscribe CNY2.5 billion worth of shares, while JuneYao Group -- JunYao Airlines' shareholder -- or its designated unit will buy CNY7.3 billion. China Structural Reform Fund will take the remaining CNY2 billion.

This is the first time for domestic private airlines to invest in the three major state-owned airlines in China, which is of great significance. China Eastern earlier admitted Delta Air Lines and Ctrip.Com as strategic investors. Delta invested about HKD3.5 billion for the carrier's H shares and took a 3.55 percent stake in 2015. Ctrip.com invested CNY3 billion for its A-shares and obtained a 3 percent stake, in 2016.

Editor: Ben Armour

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Keywords: State-Owned Enterprises , Ownership Structure Reform , Private Investment , China Eastern Airlines , Juneyao Airlines