Delta Air Lines and Swissair are unravelling their remaining ties with Singapore Airlines (SIA), as the Asian carrier moves closer to entry into the Star Alliance.
The Swiss and US airlines have sold their equity in SIA, which has in turn offloaded its shareholdings in the other two carriers. The reciprocal investments date back to the days of the "Global Excellence Alliance", which was set up in 1989 and dismantled in 1997 after the airlines decided the alliance had promised more than it delivered.
The three companies agreed to drop a 10-year moratorium on selling their mutual investments, which would have run until August 2001. Swissair sold its 8 million SIA shares - a 0.62% stake - on 21 September through US investment house Salomon Smith Barney at S$17.25 ($10.16) a share, saying the move helped to balance its cashflow after buying US catering group Dobbs for $1.6 billion.
Delta followed suit on 28 September, selling its 2.74% stake - 35.2 million shares - at S$15.90 each, also through Salomon Smith Barney. The lower price reflected a weakening of the SIA share price in late September. SIA has bought back 16.9 million of its own shares, and placed on the market its entire 2.7% stake - 320,000 shares - in Swissair parent SAirGroup, and its 5 million Delta shares, for a total of S$526.1 million.
Delta says it has bought back all 5 million shares held by SIA. "We are all trilaterally divesting ourselves of each others' shares," it says. Delta will sell its remaining 4.5% stake in SAirGroup, which itself is understood to be planning to sell its 4.6% stake in Delta.
Source: Flight International