China's East Star discloses CNY752m debt

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Grounded privately-owned Chinese carrier East Star Airlines has revealed that it has debts of 752 million Chinese yuan ($110 million).

Company spokesman Zhao Changbing made the statement to quell rumours about the company's assets and debts, says a report by China's state-controlled Xinhua news agency.

Zhao also reportedly said the company has assets of 1 billion yuan.

On 24 June Chinese media reported that East Star's owners said they planned to sell an 85% stake in the company to outside investors to help it avoid bankruptcy and begin operations once again.

The reports suggested that East Star would get 500 million yuan from a group of investors led by Shanghai Yujie Industry, a little-known textile manufacturer. No other details were available and company officials declined to comment when contacted.

The Civil Aviation Administration of China grounded the Wuhan-based airline in March after the city government said the carrier was unable to meet payments to creditors. These include the parent of fuel supplier China Aviation Oil and lessor GE Commercial Aviation Services (GECAS). The move came two days after East Star rebuffed a take-over bid by state-owned Air China.

According to Flight's ACAS database the airline has a fleet of nine Airbus A320-family aircraft, all on lease from GECAS. It launched operations in May 2006 and its owner is the Wuhan-based travel agency conglomerate China East Star Group.