Air China (0753) plans to offload a 1.61 percent stake in Cathay Pacific Airways (0293) for HK$1.32 billion, according to a filing on Tuesday.
The state-owned carrier has agreed to sell 108 million shares it held in Cathay for HK$12.22 apiece, a 6.6 percent discount to the closing price on Monday.
Air China estimated the share sale will bring in a pre-tax gain of 182 million yuan (HK$203 million) when it closes on or before Thursday.
Upon the completion of the sale, Air China’s stake in Cathay will fall to 27.11 percent. Earlier last year, Qatar Airways had agreed to sell a 9.57 percent holding in Cathay back to the Hong Kong carrier.
When the disposal and the share buy-back completes, Air China’s shareholding in Cathay will rise to 29.98 percent while Swire Pacific’s stake will increase to 47.65 percent.
Air China said its interest in Cathay will “continue to be maintained at an appropriate level” following the completion of the sale.
It remains an important strategic shareholder of Cathay and “continues to be optimistic about Cathay Pacific’s development prospects, and its support for Cathay Pacific remains unchanged.”
Shares of Cathay fell 1.45 percent to HK$12.9 while those of Air China rose 0.4 percent after the announcement.
