'Murky' delay in Cathay deal for HNA over aircraft

Business | Tereza Cai 17 May 2019

Cathay Pacific Airways (0293) has delayed its first payment to the HNA Group for the purchase of HK Express, according to Forbes.

Cathay Pacific was due to pay HK$1.2 billion to HNA on May 8, but claimed it was not obliged to pay that since HK Express had failed to dispose of Boeing 747 freighter aircraft it acquired under murky circumstances, sources say.

It cited a spokesperson as saying that all related parties are trying to complete the transaction, and the airline company expects to finish the acquisition by the end of this year, while refusing to comment on the history of the aircraft.

Cathay Pacific proposed in March to acquire all the shareholdings of HK Express for HK$4.93 billion, with HK$2.25 billion in cash and the remaining HK$2.68 billion through the issue of loan notes.

Meanwhile Merlin Swire, chairman of Swire Pacific (0019, 0087) said the company would improve the dividend payout ratio but has no share buyback scheme. Swire was asked at the annual meeting yesterday whether the company would consider repurchasing shares to narrow the price difference between its A share and B shares.

Swire Pacific is the only listed firm with two classes of shares in Hong Kong, but Swire said the company has no intention to change the current dual-class share structure, as the move might not necessarily gain support from a majority of shareholders.

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