Singapore Airlines Cargo plans to acquire a 16% equity stake in Shanghai-based China Cargo Airlines, subject to regulatory and other approvals. Its investment will amount to RMB328 million ($49.2 million).
"Following an investment agreement signed in Shanghai today, the parties will seek approvals for China Cargo Airlines to be re-organised into a limited liability Chinese-foreign equity joint venture company," says SIA Cargo.
Following the deal, China Eastern will hold 51% of China Cargo, Cosco 17%, Concord Pacific (EVA Airways affiliate company) 16%, and SIA Cargo 16%.
The deal will reduce China Eastern's stake from 70% now. The SIA Cargo deal comes as China Eastern seeks to streamline its cargo operations, as it faces competition from a new cargo joint venture between Air China and Cathay Pacific Airways.
SIA Cargo's investment in the re-organised company will amount to 328 million yuan, it adds.
On 16 December Taiwan's EVA said it has acquired a 16% stake in Shanghai-based China Cargo Airlines for 328 million yuan ($49.2 million), and has divested its 25% stake in Shanghai Airlines Cargo International.
China Cargo Airlines operates a fleet of 13 aircraft comprising three Airbus A300 freighters, two Boeing 747-400 freighters, three Boeing 777 freighters and five McDonnell Douglas MD-11 freighters.