CCTV

Headline News

China

Singapore Airlines rejected to buy China Eastern Airlines stake

WATCH VIDEO

Source: CCTV.com | 01-09-2008 10:19

China Eastern Airlines shareholders have rejected a bid by Singapore Airlines to buy a minority stake in the company. The vote comes two days after Air China made a last-minute public offer to top Singapore Airlines' bid.

China Eastern Airlines says Singapore Airlines'' bid would bring the carrier cash and foreign expertise. But shareholders disagree. Over 70 percent of H shareholders and over 90 percent of A share holders voted against the bid.

China Eastern Airlines says Singapore Airlines' bid would bring the carrier cash and foreign expertise. But shareholders disagree. Over 70 percent of H shareholders and over 90 percent of A share holders voted against the bid.

China Eastern Chairman Li Fenghua has expressed great regret at the outcome, and did not immediately say what the carrier will do next.

Singapore Airlines and its parent, Temasek, offered 3.8 Hong Kong dollars a share for a 24 percent stake in China Eastern. But Air China's parent company, the China National Aviation Company, swooped in on Sunday with a counterbid of at least 5 Hong Kong dollars per share for a stake of up to 30 percent in China Eastern.

China Eastern is the first aviation company in China to go public, and has been actively seeking opportunities to acquire domestic rivals. But fierce competition has put China's third largest airline heavily in debt. The company hopes Singapore Airlines' bid would bring a cash injection and improve management. Despite the rejection by shareholders, the move by China Eastern is expected to have a far reaching impact on China's aviation industry.

China National Aviation Says it plans to submit a bid within two weeks, and hopes to cooperate with China Eastern to develop the aviation giant.

 

Editor:Zhang Ning