What’s new: Shanghai-based carrier Juneyao Airlines Co. Ltd. (603885.SH) plans to partner with strategic investors to set up a 30 billion yuan ($4.6 billion) partnership for investing in airline operators.
The new partnership may participate in acquiring airline assets from HNA Group Co. Ltd., which is in bankruptcy restructuring and is seeking strategic investors for its airline, airport and retail businesses, according to people close to the matter.
The Juneyao board approved the plan to establish Shanghai Jidaohang Aviation Technology Limited Partnership, Juneyao Airlines said Thursday in a statement.
Juneyao Airlines will invest 5 billion yuan ($773 million) in the partnership, and its shareholder Shanghai Juneyao Aviation Investment Co. Ltd. and other undisclosed strategic investors will commit as much as 24.95 billion yuan, according to the statement.
Juneyao Airlines and its shareholder will also jointly set up Shanghai Junxianghai Aviation Development Co. Ltd., to invest 50 million yuan in the new partnership.
The background: Four private investors submitted bids for HNA’s airline assets, according to a person close to the working team that the Hainan provincial government set up last year to defuse the conglomerate’s debt crisis. The person didn’t name the four investors.
Like many airlines affected by the Covid-19 pandemic, Juneyao Airlines is losing money. It reported a net loss of 485.5 million yuan in 2020, reversing a net profit of 1 billion yuan for the previous year. Meanwhile, the company posted 10.1 billion yuan of revenue, down 39.7% year-on-year.
At the end of 2020, it had 32.3 billion yuan in total assets and 21.4 billion yuan in total liabilities, with a liabilities-to-assets ratio of 66.3%.
Contact reporter Denise Jia (huijuanjia@caixin.com) and editor Bob Simison (bobsimison@caixin.com)
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