Buys back 9.7% stake for HK$6.97b at a 4% discount to closing price
\n Doha
\nState-owned Qatar Airways has decided to sell its entire stake in Cathay Pacific Airways (0293.HK) for about $897 million (HK$6.97 billion), marking its complete exit from Hong Kong\u2019s flagship airline after eight years.
\nCathay said late on Wednesday that the Doha-based carrier had approached it about selling its entire 9.7% stake, and it would repurchase the shareholding through a buyback at HK$10.8374 per share, roughly a 4% discount to its last closing share price.
\nThe Gulf carrier had bought the stake in November 2017, making it the third-largest shareholder in Cathay after Swire Pacific (0019.HK) and Air China (601111.SS). Cathay is paying roughly a 35% premium over the price Qatar Airways originally paid for the stake to buy it back. The Hong Kong carrier said it would fund the deal through internal resources and existing credit lines.
\n\u201cI don\u2019t think there\u2019s anything special to read into it (buying back from Qatar). I think it\u2019s more likely about Qatar Airways having their own cash needs,\u201d said Kenny Ng Lai-yin, securities strategist at China Everbright Securities International.
\nNg said the deal should be positive for Cathay\u2019s stock price as there would be fewer shares floating in the market, meaning less selling pressure. Shares of Cathay rose 4.8% on Thursday, while the Hong Kong-listed shares of Air China climbed 4%, and Swire Pacific\u2019s stock was up more than 1%.
\nBased at the world\u2019s busiest cargo airport, Cathay is one of Asia\u2019s largest cargo carriers and has benefited from rising e-commerce volumes out of China.
\nExit strategy allows for \u2018long-term growth\u2019
\nCathay was Qatar Airways\u2019 first major investment in an Asian airline, aimed at boosting its global influence and increasing traffic through its Doha hub. There were no Qatar-nominated directors on Cathay\u2019s board, meaning it had little influence over the Swire Pacific-managed airline.
\nBefore Qatar Airways\u2019 investment, Cathay flew between Hong Kong and Doha as part of a codeshare arrangement between 2014 and 2016, but the route was later axed \u201cfor commercial reasons.\u201d
\nQatar Airways CEO Badr Mohammed Al-Meer said the exit reflected the company\u2019s disciplined portfolio strategy and followed a period of strong results, allowing it to optimise investments and position itself for long-term growth.
\nThe Middle Eastern airline has pursued a global investment strategy, taking stakes in major carriers such as British Airways parent IAG (ICAG.L), South American carrier LATAM (LTM.SN), and Virgin Australia (VGN.AX).
\nCathay Chairman Patrick Healy said the stake buyback reflected strong confidence in the company\u2019s future. The airline has laid out an investment plan worth HK$100 billion over seven years, including fleet renewal, new cabin products, and upgraded lounges.
\nCathay suffered prolonged losses during the COVID-19 pandemic, with Hong Kong among the last destinations to lift travel restrictions. The airline\u2019s business is now recovering, with Cathay and its budget arm HK Express carrying 20% more passengers in September than a year earlier.<\/p>\n","protected":false},"excerpt":{"rendered":"
Buys back 9.7% stake for HK$6.97b at a 4% discount to closing price Doha State-owned Qatar Airways has decided to sell its entire stake in Cathay Pacific Airways (0293.HK) for about $897 million (HK$6.97 billion), marking its complete exit from Hong Kong\u2019s flagship airline after eight years. Cathay said late on Wednesday that the Doha-based […]<\/p>\n","protected":false},"author":2,"featured_media":513034,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"class_list":{"0":"post-513012","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-world"},"yoast_head":"\n