Hong Kong Airlines reportedly seeks $255 million to keep licence

Hong Kong Airlines shareholders have demanded to see 2018 accounts before considering providing at least HK$2 billion ($255 million) needed to ensure the carrier - partly owned by the indebted HNA Group - keeps its licence, according to a Reuters report citing two sources.

Shareholders questioned the airlines’ dealings with other HNA firms, including querying the prices paid to lease planes from affiliates as well as the cost of materials bought from them, the sources said, declining to be identified as the information was not public.

At last week’s meeting, Hong Kong Airlines executives told shareholders that without fresh funds, the airline’s operating licence was at risk, said the people familiar with the matter.

Executives then discussed raising HK$2 billion via share placements, the people said. Such a move would significantly dilute the holdings of shareholders if they do not participate.

Major shareholders include Chinese private equity firm Frontier Investment Partner with about 34 percent, and Zhong Guosong, a former executive and director of the airline, at about 27 percent. HNA cut its stake in the carrier two years ago and currently owns 29 percent through Hainan Airlines, its mainland flagship airline and China’s fourth-largest carrier.

The information on this page may have been provided by a contributor to ChinaGoAbroad, and ChinaGoAbroad makes no guarantees about the accuracy of any content. All content shall be used for informational purposes only. Contributors must obtain all necessary licenses and/or ownership rights from the relevant content owner(s) before submitting such content (including texts, pictures, photos and diagrams) to ChinaGoAbroad for publication. ChinaGoAbroad disclaims all liability arising from the publication of any content/information (such as texts, pictures, photos and diagrams that infringe on any copyright) received from contributors. Links may direct to third party sites out of the control of ChinaGoAbroad, and such links shall not be considered an endorsement by ChinaGoAbroad of any information contained on such third party sites. Please refer to our Disclaimer for more details.