Air China (CA, Beijing Capital) intends to raise up to CNY7.8 billion yuan (USD1.1 billion) via a private share placement to pay for new aircraft and boost its working capital, according to a December 22, 2023, stock market filing.
While the filing did not disclose the details of the aircraft acquisitions, merely saying that "through the issuance of A Shares and H Shares to specific investors, the company intends to further optimize its fleet structure, rationally expand the fleet size, strengthen its security assurance capabilities, enhance the competitive advantage of its principal air transport business, and accelerate the realization of the company's strategic planning," it did reveal CNY4.2 billion (USD596 million) would be used to buy 17 aircraft. Chinese language news outlets report that this includes six C919s and eleven ARJ21-700s, with deliveries pencilled in across 2024 and 2025.
Air China Limited intends to issue up to 854,700,854 new A-Class Shares to China National Aviation Holding (CNAHC), a Chinese state-owned enterprise that already holds 50.14% of Air China's issued stock and is its controlling shareholder. The A-Class Shares will be issued at CNY7.02 (USD1) each. The airline also told the bourse that it intends to issue 392,927,308 new H-Class Shares to China National Aviation Corporation (CNACG) a CHAHC subsidiary that owns 9.61% of Air China's issued shares. The H-Class Shares will be issued at HKD5.09 Hong Kong dollars (USD0.65) each. Air China's yuan-denominated A-Class Shares are traded on the Shanghai Stock Exchange (SSE), while the H-Class Shares trade on the HKEX. The A-Class Share issuance is flagged to raise approximately CNY6 billion (USD851 million), while the H-Class issuance will raise around CNY1.8 billion (USD255 million).
In addition to buying new aircraft, the filing says the remainder of the funds will replenish working capital, improve capital structure, strengthen financial soundness, enhance the airline's comprehensive risk resistance capabilities, and boost market confidence.
Earlier this year, Air China raised CNY15 billion (USD2.1 billion) after issuing 1,675,977,653 A-Class Shares to 22 investors, including CNAHC. The new issuance remains subject to shareholder and regulatory approval. Air China says it will advise shareholders of a date for an extraordinary general meeting to vote on the proposal.
