Cathay (CX) in the news

Discussion in 'Travel News' started by QF WP, Jun 10, 2006.

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  1. QF WP

    Moderator

    Jun 20, 2002
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    #1 QF WP, Jun 10, 2006
    Last edited by a moderator: Jun 11, 2006
    Cathay buys Dragonair for $1B

    Friday, June 9, 2006 Posted: 0034 GMT (0834 HKT)


    [​IMG]


    HONG KONG, China (Reuters) -- Hong Kong's main airline Cathay Pacific Airways Ltd.said on Friday it will pay HK$8.22 billion ($1.05 billion) in cash and shares to take over rival Hong Kong Dragon Airlines Ltd.

    The long-expected deal will expand Cathay's access to the fast-growing mainland China aviation market.​

    As part of the deal, Cathay will also pay HK$4.07 billion ($522 million) to double its stake in Beijing-controlled Air China Ltd. from 10 percent to 20 percent. In turn, Air China will pay HK$5.39 billion ($691 million) for a 10.16 percent stake in Cathay, the companies said.

    Air China controls China National Aviation Co. Ltd. (CNAC), which is the largest shareholder in unlisted Dragonair, owning 43 percent. Cathay already held a 17.8 percent stake in Dragonair and Cathay's parent, Swire Pacific, had a separate 7.71 percent holding.

    Cathay Pacific and Air China said they planned to set up a jointly owned cargo airline based in Shanghai, to be held 51 percent by Air China and 49 percent by Cathay. The companies also said Hong Kong Dragon Airlines, better known as Dragonair, would keep its current branding for six years.

    Cathay has been frustrated by its limited access to mainland China, where its only passenger routes are to Beijing and Xiamen. Dragonair, which flies to 23 mainland cities including the lucrative Shanghai market, fills that gap in Cathay's network.

    Cathay is buying the shares in Dragonair that it does not already own from Swire Pacific, as well as CITIC Pacific and CNAC, for HK$820 million in cash and the remainder in new Cathay shares issued at HK$13.50 each, a premium of 4.2 percent over their last closing price.​

    Air China is buying its shares in Cathay for HK$13.50 each from Swire and CITIC, the companies said. Cathay will pay HK$3.45 per share in Air China to double its holding in the carrier, a premium of 11.3 percent over the last close.​

    Cathay also said it would pay a special dividend of HK$0.32 per share on completion of the deal.​

    Shares in all five companies, which have been suspended since Monday morning, were to resume trading on Friday, the companies said.​


    The deal will see Swire's stake in Cathay pared from 46.3 percent to 40 percent, while CITIC Pacific's holding in Cathay will fall from 25.4 percent to 17.50 percent. ​



    Copyright 2006 Reuters. All rights reserved.​
     

  2. siri

    siri Intern

    Apr 19, 2006
    73
    14
    West Pennant Hills
    Not a bad idea, since cathay access to BJ is limited 3 days per week and very funny times as well.
    Cathay already use Air China codes and I will not recomment any one to fly Air China...so make sure when you fly Cathay to check whose plane you are flying.

    Dragon flights are very good and good food as well. Any one who is 6' or above make sure to book Bus. class since leg room on economy is so small.
     
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