Hainan Airlines will offload its remaining shares in Brazil's Azul at a discount, making almost no gains from its original investment in 2016 as the Chinese carrier's debt-ridden parent continues to divest assets.
Hainan is offering to sell almost 19.4 million American depositary shares at $16.15 each, according to new pricing details announced by Azul late yesterday. The price is below the all-time low of $16.37 per share that was reached on 27 June.
The Chinese airline invested $450 million for a 23.7% stake in Azul in 2016, and sold a just over 4% stake to a subsidiary of United Airlines parent United Continental Holdings for $138 million in April.
Based on the offering price in the recent equity offering, Hainan will receive about $313 million from the sale of its remaining shares in Azul. The total proceeds of $451 million from both equity sales is just a little above the $450 million Hainan forked out for Azul two years ago, without taking into account any related fees.
Hainan's parent HNA Group has been divesting investments following a years-long acquisition spree, as it seeks to reduce debt.
Azul says the offering is expected to close on 29 June.