Singapore Airline, Temasek Acquire 24 Pct In China Eastern
allheadlinenews.com
Singapore - Shares of China Eastern Airline added on Monday on the announcement that it has sold a 24 percent stake to Singapore Airlines, and its parent, Temasek for 7.2 billion dollars.
Singapore Airline, the world's largest airline in terms of market capitalization, is expected to pay $596 million for a 15.7 percent stake in the carrier, while Temasek will spend will acquire a 8.3 share for $321 million.
China Eastern is seeking to improve its services in the wake of stiff competition, reports BBC News. Shares of the carries shot up 88.5 percent or $3.33 dollars to $7 on the news.
"It's a good turnaround story," Joseph Lau, managing director of Tai Fook Asset Management Lau, reports Thomson Financial. "After the stake sale, China Eastern is expected to report better earnings and management quality will improve substantially."
Trading in the company was temporarily halted as the deal with Singapore and Temasek was being formulated.
"The sale will be beneficial for China Eastern Airlines, which will gain financial support and some industrial expertise from an industry leader," said Philip Chan, research head at CAF Securities Co Ltd in a report by AFX.
