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Hainan Air to raise 7B yuan via share sale to Temasek unit, other investors

Hainan Airlines Holding Co. Ltd. plans to raise 7 billion Chinese yuan by selling as much as 20% of its Shanghai-listed shares to a maximum of 10 investors, including Singapore's sovereign wealth fund Temasek Holdings (Pte.) Ltd.'s unit Temasek Fullerton Alpha Pte. Ltd., Bloomberg News reported, citing a June 9 filing to the stock exchange.

The air carrier intends to use the proceeds to fund plane purchases, aviation training, maintenance and its airport business, Bloomberg said.

Hainan Air reportedly added that it is considering purchasing stakes in aviation training, maintenance business and airlines, worth 10.5 billion yuan from HNA Group Co. Ltd. and the latter's subsidiaries.

The air career said that following the potential deal, its controlling shareholder will shift from Grand China Air Co. Ltd. to HNA Group Co. and parties acting together, while the ultimate controlling party will change from the Hainan branch of State-owned Assets Supervision and Administration Commission to Cihang Foundation.

A Temasek spokesman confirmed the filing but declined to comment further, the report said.

Hainan Air's restructuring plan comes after HNA and Temasek said in April they are weighing partnerships in aviation, logistics and airport infrastructure, Bloomberg said. Debt-laden HNA has been selling assets, including a $6.5 billion stake sale in Hilton Worldwide Holdings Inc., to ease its strained finances, Bloomberg said.

As of June 8, US$1 was equivalent to 6.41 Chinese yuan.