China Eastern to Raise Up to $2.2 Billion in Share Sale
The stock of China Eastern Airlines was trading up 2 percent Tuesday afternoon after the state-owned carrier reported its plans to expand with the proceeds of its share sale.
The stock of China Eastern Airlines Corp. (NYSE: CEA) was trading up more than 2 percent by Tuesday afternoon at $33.11 per American depositary share after the company said it seeks to sell up to $2.23 billion of its shares to expand its fleet and replenish working capital.
State-owned China Eastern, the country's second largest carrier by number of passengers, said in a filing to the Shanghai stock exchange on Tuesday that it is planning to acquire 18 airplanes, 15 flight simulators, and 20 backup engines with $1.78 billion of the proceeds from the share sale. The remaining $452.4 million would be used for working capital, the company said.
A major private carrier based in Shanghai, Juneyao Airlines Co. Ltd., together with its controlling shareholder Juneyao Group, were announced as the lead investors on the deal, bringing $1.93 billion. Juneyao Airlines and the Group would hold a combined 5 percent stake in China Eastern upon completion of the sale, if they fulfill the upper limit of the proposed share acquisition.
Another investor, China Structural Reform Fund Corporation Ltd., which provides support to state-owned enterprises, is spending $301.6 million for the shares of China Eastern.
The shares of China Eastern Airlines were trading at $33.11 per share Tuesday afternoon, up 2 percent, after it reported its plans to expand.
(Source: Thomson Reuters Eikon)
(Reuters contributed to this article)