China Southern Airlines has taken control of the 50% stake in engine shop MTU Maintenance Zhuhai previously held by its parent company, China Southern Air Holding.

The equity transfer represents partial payment for additional shares in the carrier under a private placement being made to 10 investors, which is expected to raise CNY12.7 billion ($1.86 billion).

China Southern Air Holding agreed to subscribe to at least 31% of the 1.8 billion A-class shares being sold in the offering, which will also include a cash payment in addition to the equity in MTU Zhuhai.

The holding company will also subscribe to a HK$3.7 billion ($471 million) placement of Hong Kong-listed H shares in the airline.

Funds raised from the two transactions have been earmarked by the airline to finance the addition of 41 aircraft to its fleet, buy new seats, and support its working capital.

Source: Cirium Dashboard