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China Hainan Air completes $440m share placement

(Agencies)
Updated: 2010-02-25 10:31

SHANGHAI: Hainan Airlines Co, China's fourth-largest carrier, said on Thursday that it had completed a private placement of 595 million new shares worth 3 billion yuan.

Hainan Airlines issued the new shares to the Hainan provincial government and its parent company, HNA Group, at 5.04 yuan per share, raising money to pay back bank loans and supplement working capital, the airline said in a statement published in the official Shanghai Securities News.

Both the provincial government and the parent promised not to sell the placement shares for at least three years, it said.

China's airlines have faced strong headwinds since 2008 as a slowing economy amid the global financial crisis hit demand for air travel. Their parents and local governments have tried various means to support their operations.

The Chinese central government has also handed out cash to the sector and encouraged it to scrap or delay aircraft orders after the country's air travel growth fell into the single digits in 2008 for the first time in five years.