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.