BEIJING, March 9 China Southern Airlines Co Ltd
(1055.HK) (600029.SS), the country's top carrier by fleet size,
plans to raise up to 10.75 billion yuan ($1.6 billion) from a
discounted share issue, it said on Monday.
The airline will issue up to 1.77 billion new A shares in
Shanghai to up to 10 specific investors, including its
state-owned parent, at a price of at least 5.66 yuan.
It will also issue up to 312.5 million H shares to parent
China Southern Air Holding Company's Hong Kong subsidiary at up
China Southern's shares, which were suspended on Feb. 23,
last traded at 6.62 yuan in Shanghai and HK$2.98 in Hong Kong.
Trading in H shares will resume on Tuesday.
The company said the price represented a 12 percent discount
to the last five closing-day prices of its Shanghai stock.
It will use the proceeds to pay off up to 30 bank loans,
totalling $1.35 billion and 4.8 billion yuan. Further borrowing
would have caused its financial position to deteriorate, it said
in the statement, posted here
China's airlines have struggled since 2008 due to a slowing
economy hit by the global financial crisis.
The Chinese government has handed out cash to the sector and
encouraged it to scrap or delay aircraft orders after the
country's air travel growth fell into single digits in 2008 for
the first time in five years.
If the entire offer is taken up, Southern Air's parent China
Southern Air Holding Company will see its shareholding fall to
51.50 percent of the total issued share capital from 59.32
percent, including the H shares held by its Hong Kong unit Nan
Publicly held H shares will make up 17.41 percent, down from
21.94 percent, while publicly held A shares will account for
31.09 percent, up from 18.74 percent before the issue.
(Editing by Karen Foster)