HNA Rebuffs Report of Talks to Sell Capital Airlines to Air China
Chen Shanshan
/SOURCE : Yicai
HNA Rebuffs Report of Talks to Sell Capital Airlines to Air China

(Yicai Global) March 16 -- An HNA Group Co. unit plagued by a recent shortage of funds denied rumors yesterday that Air China Ltd. is in talks with it to purchase shares of Beijing Capital Airlines Co., a regional airline whose majority shares HNA Group and its subsidiaries hold.

Air China is mulling a buy-out of Capital Airlines and is negotiating with Capital Airlines shareholders HNA Group and Beijing's city government, Aviation Daily reported Feb. 14.

These claims are false, Yicai Global learned from HNA Aviation & Tourism, an HNA Group unit and Capital Airlines shareholder. HNA shareholders HNA Aviation & Tourism, HNA Holding Group Co., Beijing Dingyu Equity Investment Fund directly or indirectly hold an 83-percent stake in Capital Airlines, and Beijing's city government holds 17 percent through its proprietary Beijing Tourism Group Co., public data show. HNA Group is the parent of all HNA companies.

Regional air carriers under HNA Group are indeed actively negotiating with local governments to increase their capital and hope Beijing infuses funds into Capital Airlines, Yicai Global learned. Of these, Tianjin Airlines has already secured additional capital of CNY400 million from the Tianjin city government's investment platform, and Urumqi Air has also obtained a capital injection of up to CNY450 million from the Urumqi government's urban investment company. Tianjin Airlines and Urumqi Air are both regional airlines formed through joint ventures between HNA Group and local governments. Several other airlines under HNA Group -- Hainan Airlines Co., Capital Airlines, Lucky Air Co., and China West Air Co. -- are also joint ventures between HNA Group and the local governments where the airlines are based.

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Keywords: Market Rumors Denied , HNA GROUP , Capital Airlines , Asset Sale