Economy

Singapore Airlines Cargo buys stake in China Cargo

(Xinhua)
Updated: 2010-12-21 15:29

SINGAPORE - Singapore Airlines Cargo (SIA Cargo) is planning to buy a 16 percent stake in Shanghai-based China Cargo Airlines Co Ltd, a subsidiary of China Eastern Airlines, local media reported on Tuesday.

Related readings:  China Southern to be 1st Chinese airline to fly Boeing's 787 Dreamliner  Three airlines to raise surcharges in HK  China's Southern Airline to start flights to New Zealand  Turkish Airlines adds services in China

Set up with an initial registered capital of 950 million Chinese Yuan (about $143 million), the company "was 70 percent owned by China Eastern and 30 percent owned by China Ocean Shipping (Group) Company (Cosco)," according to a Tuesday's report of the Business Times.

But the impending restructuring of the cargo carrier's shareholdings will see the capital of the cargo airline rising to 3 billion Chinese Yuan (about $450 million), the report said.

SIA Cargo will hold 16 percent with its investment of 328 million Chinese Yuan (about $49 million). The new restructure will see Taiwan's Eva Airway's affiliate Concorde Pacific with a 16 percent stake.

China Eastern's stake will be 51 percent and Cosco will hold 17 percent.

This is the second China-based cargo airlines that SIA has invested in. In 2005, it bought a 25 percent stake in Shanghai- based Great Wall Airlines.

Great Wall is also 51 percent owned by China Eastern, while another 24 percent is held by Temasek Holding's Dahlia Investments.

SIA Cargo's president, Tan Kai Ping, said the investment in China Cargo Airlines would further boost SIA's exposure to the booming China market.

China Cargo operates a fleet of 13 aircraft with routes across Asia, Europe and the United States.