China Eastern Airlines To Raise Up To $2.2 Billion Through A Share Sale

(Reuters) - China Eastern Airlines Corp (600115.SS)(0670.HK)(CEA.N) plans to raise up to $2.23 billion in a share sale to expand its fleet and to replenish working capital, the company said in a filing to the Shanghai stock exchange on Tuesday.

FILE PHOTO: Passengers check in with China Eastern Airlines at Hong Kong Airport in Hong Kong, China April 4, 2018. REUTERS/Bobby Yip

China Eastern, the country’s second largest carrier by passenger numbers, will use $1.78 billion proceeds from the share sale to fund the purchase of 18 airplanes, 15 flight simulators and 20 backup engines, it said in the filing.

The remaining $452.4 million will be used to boost its working capital, the filing added.

China Structural Reform Fund Corporation Ltd, approved by the State Council to support state-owned enterprises, will invest $301.6 million in the share sale, according to the filing.

Juneyao Airlines Co Ltd (603885.SS), and its controlling shareholder Juneyao Group, will spend a combined $1.93 billion in China Eastern’s share sale, a separate filing to the Shanghai stock exchange showed.

The Shanghai-based Juneyao Airlines and the Group are expected to own more than 5 percent stake in China Eastern Airlines if they fulfill the upper limit of the proposed share subscriptions.

Reporting by Min Zhang in Beijing and Meg Shen in Hong Kong, editing by Louise Heavens