Tuesday, December 16, 2008

Hainan Airlines eyes hotel stake, office building in Beijing

Hainan Airlines Co<600221><900945>, the fourth-largest carrier in China, plans to spend RMB 2.35 billion (US$343 million) in acquisition of potential stake in a hotel and an office building in Beijing, sources reported.

The Chinese carrier said in a statement that it is considering allotting RMB 619 million to acquire a 45% stake in Beijing Yanjing Hotel Co from its affiliate Hainan Hotels and Resorts.

Hainan Airlines also expects to set aside RMB 1.73 billion to purchase a 65% of holdings in Beijing Kehang Investment Ltd from Yangzijiang Real Estate Group and another 30% stake in Beijing Kehang from Hainan Hotels and Resorts.

Last week, Hainan Airlines was reportedly in talks with the Hainan provincial government on a possible capital injection. The provincial government will also provide favorable policies, such as tax cut, interest rate subsidy, to help the carrier cope with the negative impacts triggered by the global financial crisis, the China Knowledge reported earlier.

Chen Feng, president of the Hainan-based air carrier, noted that the company would post losses for the whole year despite the gains in the third quarter.

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