Qatar Airways increases shareholding of China Southern Airlines

2019-01-04 10:43

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The Guangzhou-based airline China Southern Airlines announced Wednesday that Qatar Airways, one of the Chinese airline's minority shareholders, had raised its ownership of the company to 5 percent, The Paper reported.

Under the Chinese securities rules, a listed company must release an announcement as long as one of its minority shareholders increases its shareholding to 5 percent.

According to the announcement, Qatar Airways lifted its holdings of the China South Airlines' stocks by purchasing the latter's 8,600 outstanding shares in the A-share market through the Shanghai-Hong Kong Stock Connect mechanism and another 6,000 outstanding shares in the Hong Kong stock market.

The announcement also says that Qatar Airways is considering a further increase of its shareholding in China Southern Airlines within the next 12 months.

The announcement makes it clear that since the increase by Qatar Airways in its ownership of China Southern Airlines doesn't trigger a tender offer, it won't change the controlling shareholder and actual controller of this Chinese airline.

As for the purpose of this move, Qatar Airways says that this step is part of its strategic investment plan which aims to further enhance its operational ability as well as its air network connections.

As a Middle East-based civil aviation conglomerate, Qatar Airways, which is wholly owned by the government of Qatar, is now holding stakes in several other foreign airlines besides China Southern Airlines, which include the Hong Kong-based Cathay Pacific Airways, the parent company of UK International Airlines as well as Latam Airlines, the largest airline in South America.

Apart from Qatar Airways, China Southern Airlines is also partly owned by the world's largest airline American Airlines, which played a critical role in advancing the Chinese airline's transition towards a state-owned enterprise with mixed ownership by buying 200 million U.S. dollars worth of the company's shares in 2017.

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