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China Eastern says bailout increased to one billion dollars

by Staff Writers
Shanghai (AFP) Dec 30, 2008
China Eastern Airlines, which is struggling with dwindling passenger numbers, said Tuesday a previously planned government cash injection would be more than doubled to over one billion dollars.

The country's third-largest carrier will receive the bailout money by selling new shares to its state-owned parent China Eastern Air Holding Company, it said in a statement to the Shanghai Stock Exchange.

It will issue 1.4 billion new yuan-denominated Shanghai-listed A shares to China Eastern Air Holding Company and the same amount in H shares listed in Hong Kong to a subsidiary of the parent, it said.

The total proceeds of the new share issuance will exceed seven billion yuan (one billion dollars), according to the statement.

An initial plan announced two weeks ago had the company issue 652.2 million new A shares and the same number of H shares to its parent in exchange for a three-billion-yuan bailout.

The increased cash injection will be used to fund working capitals and will "improve the company's capability to sustain operations and enhance its competitiveness", the statement said.

By the end of September, China Eastern's total debt amounted to 74.3 billion yuan, compared with total assets of 75.5 billion yuan.

But its debt-to-asset ratio will be reduced to 90.1 percent from 98.5 percent upon the completion of the cash injection, according to the statement.

China's aviation industry has had a bad year as travel demand has slumped amid the global financial crisis. China Eastern posted a 2.3-billion-yuan loss in the first nine months.

China Eastern said it was widely expected that the Chinese civil aviation industry would experience losses as a whole in 2008 and the global crisis has made it extremely hard for carriers to get short-term loans.

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Britain's environment minister concerned by Heathrow plan
London (AFP) Dec 14, 2008
The British government should ditch plans to expand London's main airport Heathrow if pollution levels are not dramatically cut, Environment Minister Hilary Benn told The Sunday Times newspaper.

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