HONG KONG : China Eastern Airlines said Monday that it would pump 1.05 billion yuan (US$157 million) into its China Cargo Airlines joint venture as it looks to stave off competition from Air China.
China Eastern said its partner, China Ocean Shipping Group (COSCO), as well as two new shareholders, would also inject funds for a combined investment of 2.05 billion yuan in the cargo firm.
After the investment, China Eastern's stake in the firm would fall to 51 percent from 70 percent, while COSCO would hold 17 percent of the company, down from its current 30 percent holding.
The two new shareholders, Singapore Cargo Airlines, a unit of Singapore Airlines, and Concord Pacific, a unit of Taiwan's EVA Airways, would each hold 16 percent of the cargo business, China Eastern said.
China Cargo operates a fleet of 13 aircraft with routes across Asia, Europe and the United States.
The reconfigured joint venture would acquire Great Wall Airlines and the key assets of Shanghai Cargo Airlines, China Eastern said.
In April, Air China and Hong Kong's Cathay Pacific said they would set up a Shanghai-based cargo joint venture to tap rising air freight between China and its trading partners.
The joint venture is scheduled to start operations at the beginning of 2011. – AFP/ch
Channel News Asia