China Eastern Airlines looks to raise US$2.2 bn through share sale

China Eastern Airlines ©AirTeamImages

China Eastern Airlines, China’s second-largest carrier by passenger numbers has announced in a filing to the Shanghai Stock Exchange that it is looking to raise US$2.23 billion through a share sale.

The revenue raised will be divided between asset acquisitions and increasing working capital. Approximately US$1.78 billion will be used to fund the acquisition of 38 aircraft which will be delivered between 2022 and 2024. The planes on order are four COMAC C919s, 24 ARJ21-700s, six Airbus A350-900s and four Boeing 787-9s which currently have a list value of US$4.38 billion. In addition, China Eastern Airlines will be looking to purchase 15 flight simulators and 20 backup engines.

The remaining US$452.5 million will be allocated as working capital according to the filing. The filing also shows that the China Structural Reform Fund Corporation will purchase US$301.6 million of the shares, while in a separate filing it was declared that Shanghai-based JuneYao Airlines and the JuneYao Group will purchase US$1.93 billion of shares which, if successful, will take their overall stake in China Eastern Airlines to over 5%. China Eastern Air Holding Company, the controlling shareholder of the company, would invest at least US$742 million in the share sale, according to the plan. (£1.00 = US$1.23 at time of publication).

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