Juneyao Airlines has completed the transfer of a 7% stake to China Eastern Airlines' parent company, China Eastern Air Holding.
In a Hong Kong stock exchange disclosure, China Eastern states that the transaction closed on 8 January.
CEA Holding will also invest up to CNY3.15 billion ($461 million) to purchase up to 169 million Shanghai-listed A-shares that Juneyao will issue through a separate private placement. That will see it ultimately hold around a 15% stake in Juneyao.
"The transfer of existing shares of Juneyao Airlines by Eastern Investment is significant in further enhancing and deepening the strategic partnership between CEA Holding and Juneyao Group, establishing Shanghai as an aviation hub," says China Eastern.
The investments are in-line with the Chinese government's push for more cooperation between state-owned corporations and private capital.