Carrier stake-sale plan to SIA fails

Source: Xinhua  |   2008-8-11  |     NEWSPAPER EDITION

CHINA Eastern Airlines yesterday announced that the stake-sale plan to Singapore Airlines and Lentor Investments had failed.

The preliminary agreement would become invalid if no further progress was achieved as of Saturday, the expiring date, China Eastern said in a statement to the Hong Kong stock exchange yesterday.

SIA and Temasek, Singapore's state-linked investment firm and the parent of Lentor Investments, signed a preliminary deal in September to take a 24-percent stake in the Shanghai-based China Eastern, the country's third-biggest carrier, for US$923 million, or HK$3.80 (49 US cents) per share. The carrier wanted a deal to cut its debt and to benefit from SIA's management expertise.

Minority shareholders vetoed the stake sale to SIA in January, after the parent of Air China Ltd pledged to make a higher offer.

Shares in China Eastern fell to their lowest in 17 months last Friday after Board Secretary Luo Zhuping said the company had no immediate plans to reopen negotiations about selling a stake to SIA.