China Southern increases holding in Xiamen Air by 4% for US$97 million
China Southern Airlines has made a deal to take an additional 4% holding of Xiamen Air from the other Xiamen Air shareholder, Xiamen C&D Corp, for RMB627 million.
China Southern Airlines has made a deal to take an additional 4% holding of Xiamen Air from the other Xiamen Air shareholder, Xiamen C&D Corp, for RMB627 million (approx: US$97 million).
Xiamen Air has been an important subsidiary of China Southern Airlines. Xiamen C&D, which held 34% of Xiamen Air, is also an affiliated legal person for the carrier. In July, Xiamen C&D purchased 15% of Xiamen’s Air’s equity from a subsidiary of Jizhong Energy Group, at the consent of China Southern Airlines.
China Southern also agreed to relinquish its pre-emptive right in the agreement. After the deal, Xiamen C&D then sold 4% equity of Xiamen Air to China Southern, and 11% to Fujian Investment, in line with the July agreement between the three parties.
Xiamen Air reported RMB17.835 billion in revenues for 2014 and RMB15.301 billion revenue for the first three quarters of 2015. It also earned RMB359 million in net profits attributable to its parent company for 2014, and RMB1.137 billion for the first three quarters of this year.
China Southern increasing its holdings in Xiamen Air by an additional 4% will help consolidate its control over the subsidiary. It will also help Xiamen Air maintain a stable shareholding structure and enhance the strategic synergy between the two airlines.(Translation by David)