Cathay Pacific mum on China Eastern stake buy speculation ( 2003-11-25 14:16) (Agencies)
Cathay Pacific Airways Ltd. said Tuesday it has been exploring opportunities
to expand into the China market, but stopped short of confirming a media report
that it may buy a stake in China Eastern Airlines Corp. (CEA).
The Chinese language weekly Economic Observer said in an unsourced report
Monday that Cathay Pacific is likely to become the second largest shareholder of
China Eastern.
"We don't comment on market speculation," a Cathay Pacific spokeswoman said.
"We've been interested in the Chinese market and have been looking for
opportunities to extend further cooperation with the Chinese aviation industry,"
she said, without specifying what form of business strategy Cathay Pacific would
undertake to achieve that goal.
China Eastern Company Secretary Luo Zhuping said that the company had been in
contact with Hong Kong's largest carrier to explore the possibility of a stake
purchase.
"We were in talks with various parties before, including Cathay Pacific, but
all talks stalled because of SARS," Luo said on Thursday.
He said no such talks have been revived since the severe acute respiratory
syndrome outbreak, adding interest on the company's shares became subdued as the
epidemic had pushed many Chinese airlines into red.
In the first half of this year, China Eastern reported a net loss of 1.25
billion yuan (US$1=CNY8.28) under Hong Kong accounting standards, its first loss
since 1998.
In the third quarter to Sept. 30, the Shanghai-based airline posted a net
profit of CNY228.3 million, up from CNY96.7 million a year earlier, under
Chinese accounting standards.
Under an aviation restructuring plan announced by the Civil Aviation
Administration of China last year, China Eastern Airlines, Yunnan Airlines and
China Northwestern Air were merged to form China Eastern Air Holding Co., China
Eastern's parent.
China Eastern Airlines earlier appointed Morgan Stanley as its adviser for
these acquisitions, which it had planned to complete by the end of the year.