Cathay Pacific to Sell All Equity Stake in HAECO

Cathay Pacific Airways announced today (Monday) that it has agreed to sell all of its 15% shareholding in Hong Kong Aircraft Engineering Company Limited (HAECO) to Swire Pacific Limited at HK$105 per share for a total sum of HK$2,620 million.

Upon completion of the sale of the 24,948,728 HAECO shares, which is expected to take place on or before 14 June 2010, Cathay Pacific will cease to hold any HAECO shares.

Cathay Pacific will record a profit of about HK$1,829 million from the transaction.

"The transaction is driven by the strategic priorities of Cathay Pacific and will benefit our core aviation business", Cathay Pacific Chief Operating Officer Mr John Slosar said. He added that the longstanding operational relationship between Cathay Pacific and HAECO would remain unchanged as HAECO has always been Cathay Pacific's main provider of overhaul and maintenance services while Cathay Pacific is HAECO's biggest customer airline.

The proceeds from the transaction will be applied towards other investments in Cathay Pacific's core aviation business including investments in new aircraft, in the new cargo terminal that is being built at the Hong Kong International Airport, in continuing enhancements to the airline's products and services, as well as towards general working capital requirements.

"We are committed to the continued growth of Cathay Pacific as Hong Kong's home carrier and are investing HK$51 billion in the airline over the next few years to further develop Hong Kong as the leading international aviation hub in Asia," he said.

"We operate a fleet of 127 aircraft and currently have 31 aircraft on firm order for delivery before 2013. The company has recently resumed the construction of the HK$5.5 billion new cargo terminal at Hong Kong International Airport. The state of the art facility is expected to come into operation in 2013."