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CEA to land USD 2.2bn via stock offering
Posted on Wednesday, 11 July 2018 08:20
China Eastern Airlines (CEA) is raising as much as USD 2.23 billion through the issue of A and H shares worth CNY 11.80 billion (USD 1.78 billion) and HKD 3.55 billion (USD 452.57 million), respectively.

The sale of 1.62 billion stocks on the mainland and 517.68 million H securities in Hong Kong will introduce three new investors, including JuneYao Group, which incidentally controls domestic rival Juneyao Airlines.

Proceeds from the two private placements will fund the purchase of 18 planes, 15 simulators, and 20 standby engines.

Under terms of the A share agreement, Shanghai-listed Juneyao Airlines is subscribing for 342.47 million securities worth CNY 2.50 billion, while its controlling stockholder is acquiring the bulk of the issue for CNY 7.30 billion.

Last, but by no means least, Structural Reform Fund is coming on board as a strategic investor through the purchase of the remaining 273.97 million scrips on offer for CNY 2.00 billion.

With regards to the private placement via the Hong Kong bourse, Juneyao Airlines, or a subsidiary, has agreed to subscribe for all the H shares.

Headquartered in Shanghai and one of China’s three major state-owned carriers, CEA had a fleet of 637 passenger aircraft, at the end of 2017.

As a member of Skyteam Airline Alliance, the company has extended its network to 177 countries around the world and 1,074 destinations, and passenger capacity exceeded 110.00 million in 2017, ranked the seventh highest globally.

In the 12 months ended 31st December 2017, it generated revenue of CNY 102.48 billion (FY 2016: CNY 98.90 billion; FY 2015: CNY 93.97 billion).

Net profit attributable to equity holders totalled CNY 6.34 billion, up from CNY 4.50 billion in FY 2016 (FY 2015: CNY 4.54 billion).

Enterprise investment conglomerate JuneYao, through various subsidiaries, is involved in air transportation, financial services, modern consumption, education and technology.

Juneyao Airlines is a domestic and international passenger and cargo carrier, while Structural Reform Fund is a “state-level” entity focused on supporting projects such as industry transformation and improvement.

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