Friday, March 07, 2008

Air China to ally with Cathay in buying China Eastern's stake

Air China<601111><753> may introduce Hong Kong's Cathay Pacific Airways<293> as a partner to buy the stake in China Eastern Airlines<600115><670> as Cathay Pacific has management expertise and international competitiveness that China Eastern required, according to Air China's acting chairman Kong Dong.

Kong said Air China is always sincere about the strategic partnership with China Eastern and even if China Eastern's shares fall below the previous price it offered, it would stick to the plan. It will offer a detailed plan if the carrier accepts the current proposal.

Cathay Pacific, which once said would like to provide financial assistance for Air China's any bid, said it will back the plan, but the issue will not be done in the short term, according to Chairman Christopher Pratt.

Air China, a unit of state-controlled China National Aviation Holding Co, offered to buy as much as 30% stake of China Eastern with HK$5 apiece on January 18. But China Eastern rejected its proposal on February 26.

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