Cathay Pacific inks deal with Swire for maintenance firm
Cathay Pacific said Monday it had agreed to sell its remaining stake in Hong Kong aircraft maintenance firm HAECO to Swire Pacific, an aviation-to-property conglomerate.
The Hong Kong-based airline said it would sell its 15 percent holding in Hong Kong Aircraft Engineering Company (HAECO) for 105 Hong Kong dollars (13.45 US dollars) per share, making a total price of 2.62 billion Hong Kong dollars.
The airline said in a statement it would realise a 1.82 billion Hong Kong dollar profit from the deal, which is expected to be completed by June 14. It added that HAECO would remain its key maintenance provider.
Swire Pacific is Cathay's largest shareholder.
"The transaction is driven by the strategic priorities of Cathay Pacific and will benefit our core aviation business", Chief Operating Officer John Slosar said.
Swire had already boosted its stake in HAECO to 46.96 percent from 33.52 percent in September, buying a chunk of Cathay's holding in a deal worth 1.90 billion Hong Kong dollars, according to Dow Jones.
Swire Pacific said takeover rules required that it offered to buy any remaining shares not already in its possession for 105 Hong Kong dollars apiece, pushing its total outlay as high as 9.44 billion Hong Kong dollars.
Trading in the three firms was halted Monday morning pending the announcement.
Copyright 2010  AFP Asian Edition
