Cathay may further boost Air China stake

Cathay Pacific Airways hopes to further raise its stake in Chinese flag carrier Air China, according to Chief Executive Tony Tyler, Dow Jones reported.

The Hong Kong-based carrier has in recent weeks bought additional Hong Kong-traded shares in Air China, to reduce the diluting effect on its stake after Air China completes its planned issuance of new shares in Hong Kong and China.

Cathay's stake in Air China has risen to 18.75 percent from 18.1 percent in February. Air China also has a stake of around 30 percent in Cathay.

"If the price is right, if the time is right we certainly wouldn't rule out increasing our stake," Tyler said.

"We think it's a good airline, it's a good investment, and strategically puts us in a strong position to be if we are a key shareholder in Air China."

However, Tyler said the airline is limited to how far it can go in raising its stake. The public float requirement would cap Cathay's stake to just over 23 percent and the limit for foreign ownership in Chinese airlines is 25 percent.

Asked whether Cathay plans to boost its stake to the regulatory limit, Tyler said "it's something that makes sense for us" if the time and price are right, but added the airline "doesn't have a particular plan or target to get there."
(Source:www.cargonewsasia.com)