Cathay Pacific Airways is selling its stake in Hong Kong Aircraft Engineering (HAECO) to Swire Pacific so the carrier can invest in its airline business.
The 15% stake in the maintenance, repair and overhaul firm is being sold to Swire Pacific for HK$2.62 billion ($336 million), says the Oneworld carrier, adding that the transaction will be completed before 14 June.
"The transaction is driven by the strategic priorities of Cathay and will benefit our core aviation business", says Cathay Pacific chief operating officer John Slosar.
He adds the longstanding operational relationship between Cathay Pacific and HAECO will remain unchanged as HAECO has always been Cathay's main provider of overhaul and maintenance services, while Cathay Pacific is HAECO's biggest customer airline.
"The proceeds from the transaction will be applied towards other investments in Cathay's core aviation business including investments in new aircraft, in the new cargo terminal that is being built at the Hong Kong International Airport, in continuing enhancements to the airline's products and services, as well as towards general working capital requirements."
"The company has recently resumed the construction of the HK$5.5 billion new cargo terminal at Hong Kong International Airport. The state of the art facility is expected to come into operation in 2013."
"Swire Pacific's direct percentage shareholding in HAECO will increase from approximately 45.96% to approximately 60.96%," it says.
Source: Air Transport Intelligence news
