(Yicai Global) Dec. 1 -- Shares in Shanghai International Airport advanced as much as 5.1 percent today after the operator of Pudong International Airport said it is offering to take control of the city’s other major airport from its parent firm Shanghai Airport Group in a deal worth CNY19.1 billion (USD3 billion) and will list them both on the stock exchange.

Shanghai International Airport's share price [SHA:600009] was trading up 3.1 percent at CNY44.50 (USD7) at 1 p.m. China time. Earlier in the day it had reached CNY45.37.

Shanghai International Airport will pay CNY14.5 billion (USD2.3 billion) for a 100 percent stake in Hongqiao Airport, CNY3.1 billion (USD487 million) for a 100 percent stake in the group’s logistics arm Shanghai Airport Group Logistics Development and CNY1.5 billion for the fourth runway at Pudong Airport, the company said yesterday.

It will raise the funds by issuing new shares at CNY44.09 (USD6.90) apiece, it said. Shanghai International Airport used to own Hongqiao Airport until it swapped these assets with Shanghai Airport Group for ownership of Pudong Airport in 2014. It has long advocated taking the two airports public to increase its size and clout.

Shanghai International Airport will also release additional shares to the parent firm at CNY39.19 each to raise another CNY5 billion that it will use to build smart freight depots, improve its logistics parks and supplement working capital. Shanghai Airport’s stake in the unit will increase to 58.38 percent from 46.25 percent after the transaction.

The asset reorganization will help Shanghai International Airport better distribute flight routes from Pudong and Hongqiao airports, improve operational efficiency, enhance the attractiveness of Shanghai as an international aviation hub and drive the economic development of the Yangtze River Delta, it said.

The airport operator is having to streamline operations as the Covid-19 pandemic impacts air travel. Its share price has slumped 40 percent this year so far and in the first three quarters the firm racked up losses of CNY1.25 billion (USD196.4 million). Hongqiao Airport, though, which focuses more on domestic and regional routes, returned to profit in the first half making CNY63.7 million (USD10 million).

Editors: Dou Shicong, Kim Taylor