Top Biz News

China Southern jumps most in two months on share sale

(Agencies)
Updated: 2010-03-09 16:50

China Southern Airlines Co, the nation's biggest carrier, rose the most in almost two months in Hong Kong trading after announcing plans to sell at least 10.75 billion yuan ($1.6 billion) of new shares to pare debts.

Shares of the carrier rosed 7.05 percent to HK$3.19 (41 cents) Tuesday at the Hong Kong stock exchange. In Shanghai, the airline rose 3.5 percent to close at 6.85 yuan. The shares last traded in both cities on Feb 22.

The airline's parent will buy 1.5 billion yuan of new shares in the sale using money it received from the government as part of efforts to bail out unprofitable carriers. The parents of Air China Ltd and China Eastern Airlines Corp, the nation's No 2 and No 3 carriers, have also received state funds to pare debts.

China Southern will sell as many as 1.8 billion new shares in Shanghai for at least 5.66 yuan apiece to up to 10 investors, including its parent, China Southern Air Holding Co, it said in a filing late yesterday. The parent will also buy 312.5 million new Hong Kong shares for at least HK$2.73 each through a unit.

The carrier said on Jan 20 it expects to report a profit for 2009 because of a rebounding global economy and lower fuel prices. It posted a 4.8 billion yuan loss in 2008, its first in three years, after natural disasters and a global slowdown sapped travel.

China Southern had 60 billion yuan of net debt at the end of June, 7.2 times its total equity, according to its first-half earnings report.