Source: AFP Author: 06/02/2009
Subject Concerned: Government Airlines
Flag carrier Air China said its subsidiary Air Macau would receive a cash injection worth US$63 million from shareholders to stay in business.
The net asset value of Air Macau, in which Air China indirectly holds 51 percent, stood at a negative 91.2 million yuan (US$13.4 million) as of end 2008, the Chinese carrier said in a statement filed with the Shanghai bourse.
The only other option open was to dissolve the company according to Macau laws, said the statement.
The shareholders have decided to pump 431.2 million yuan into Air Macau by issuing new ordinary shares to existing investors and non-voting redeemable preference shares to the government of Macau, it added.
Air China itself is still waiting for a government bailout as its net loss in 2008 reached 9.3 billion yuan due to weakened demand, higher fuel costs and misjudged fuel hedging contracts.
Chinese media reports said previously the airline made the request for an injection of at least three billion yuan.