Air China has announced plans to sell part of its Cathay Pacific stake, signaling a calculated equity adjustment. The transaction highlights shifting shareholdings within Asia’s leading airline groups.
The Beijing-based carrier will sell 108.08 million Cathay Pacific shares through a market transaction. As a result, the sale represents about 1.6 percent of Cathay’s total issued shares.
The deal values each share at HKD12.22, generating proceeds near HKD1.3 billion. Consequently, Air China expects total revenue of roughly USD170 million from the disposal.
Moreover, Air China plans to complete the sale by January 8. The company also expects a pre-tax profit of about CNY182 million.
Following the transaction, Air China’s ownership in Cathay Pacific will decline noticeably. Specifically, its stake will fall from 28.7 percent to approximately 27.1 percent.
However, the airline confirmed it remains committed as a long-term investor. Therefore, executives emphasized continued confidence in Cathay Pacific’s future performance.
Importantly, the share sale supports Cathay Pacific’s upcoming buyback initiative. The airline plans to repurchase over 643 million shares from Qatar Airways.
Once completed, the buyback will reduce Cathay’s total issued shares significantly. As a result, outstanding shares will fall from 6.72 billion to 6.08 billion.
Additionally, Air China structured the sale to avoid regulatory complications. The move ensures its Cathay Pacific stake remains below the 30 percent takeover threshold.
This threshold typically triggers a mandatory general offer under Hong Kong regulations. Therefore, the sale prevents potential compliance issues following the buyback.
Meanwhile, Swire Pacific stands to benefit from the ownership shift. Its stake is expected to rise from 43.1 percent to nearly 47.7 percent.
Nevertheless, Swire Pacific has applied for regulatory relief. The company seeks a waiver from mandatory offer rules due to the increased holding.
Furthermore, Air China agreed to a 180-day lock-up period on remaining shares. This commitment aims to reassure investors about market stability.
Air China also confirmed support for the share buyback proposal. Accordingly, it will vote in favor at Cathay Pacific’s upcoming general meeting.
Cathay executives described the transaction as tactical rather than strategic. Therefore, they stressed that partnership ties with Air China remain unchanged.
Market analysts view the Cathay Pacific stake adjustment as a balance-sheet optimization. Moreover, they see it aligning shareholder interests ahead of restructuring.
Looking forward, the buyback could enhance earnings per share. Consequently, Cathay Pacific may improve long-term shareholder value.
At the same time, Air China maintains exposure to Cathay’s recovery trajectory. Thus, the Cathay Pacific stake remains a strategic asset.
Overall, the transaction reflects disciplined capital management by major airline shareholders. It also highlights evolving ownership strategies across Asia’s aviation sector.
