Urumqi Urban Construction and Investment has signed a framework agreement with Hainan Airlines to inject additional equity into Urumqi Airlines.
A stock exchange disclosure from Hainan states that the final details of the deal have yet to be established, however the increase will be limited to CNY450 million ($70.9 million)
Once the capital injection is complete, Urumqi Airlines will remain a subsidiary of Hainan Airlines.
Urumqi Urban Construction and Investment is wholly-owned by the Urumqi municipal government, and at present holds a 30% stake in Urumqi Airlines.
The announcement comes amid Hainan Airlines’ parent HNA Group’s ongoing liquidity crunch, which has seen the holding company start a process of asset sales to reduce its debt, while a number of its subsidiaries have also flagged asset and capital reorganisations.
Hainan Airlines’ shares have been in a trading halt since January ahead of an announcement on an asset reorganisation.
Since then, it has announced a similar investment agreement with Tianjin Free Trade Zone Investment into its Tianjin Airlines subsidiary, and there are reports that other similar deals may be agreed with other HNA-backed regional airline units.
Source: Cirium Dashboard