Qatar Airways pays $662M for 10 percent of Cathay Pacific

AP News
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Posted: Nov 06, 2017 3:44 AM
Qatar Airways pays $662M for 10 percent of Cathay Pacific

HONG KONG (AP) — Qatar Airways is buying nearly 10 percent of Hong Kong carrier Cathay Pacific Airways for about $662 million, the companies said Monday, in a deal making it Cathay's third-biggest shareholder.

The Middle Eastern carrier said it bought almost 3.8 million Cathay shares, which represents a 9.6 percent stake in Hong Kong's biggest airline.

Hong Kong conglomerate Swire Pacific owns 45 percent of Cathay, state-owned Air China has 30 percent and the rest is publicly traded.

Qatar Airways bought the shares from Hong Kong's Kingboard Holdings, according to a stock exchange filing by the company, which makes circuit boards and invests in property.

Kingboard expects to reap an 800 million Hong Kong dollar ($102 million) profit from selling its Cathay stake, the company said in the filing.

Cathay, which last year reported its first annual loss in nearly a decade, is carrying out a three-year corporate overhaul that includes laying off hundreds of workers as it battles to keep up with intensifying competition from rival Asian carriers.

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The investment adds to Qatar Airways' overseas portfolio. The company also owns 20 percent of International Airlines Group, which controls European carriers Aer Lingus, Iberia and Vueling; 10 percent of Chile's Latam Airlines Group; and 49 percent of Meridiana, Italy's second-biggest carrier.

Cathay shares fell 1.5 percent on Monday, while the benchmark Hang Seng Index finish nearly unchanged.