Hainan Airlines will inject capital into Shenzhen Financial Leasing Co and sell up to 3 billion yuan (US$432 million) worth of bonds to replenish working capital.
Hainan Airlines, China's fourth-largest airline, has got shareholder approval to pay 515 million yuan in cash for a 6.44-percent stake in the Shenzhen-based leasing company to boost its capital utilization and benefit from the financial leverage, the carrier told the Shanghai Stock Exchange yesterday.
Shenzhen Financial Leasing Co, China's biggest aircraft leasing firm, will expand its registered capital to 8 billion yuan with the injection.
The company is 90-percent owned by China Development Bank and 2.07-percent owned by HNA Group, Hainan Airline's parent.
The carrier will also issue up to 3 billion yuan in five-year and 10-year corporate bonds to pay back bank debt and supplement working capital, the statement said.
The company rose 2.8 percent to 7.34 yuan yesterday while the Shanghai Composite Index gained 2.48 percent to 3,459.03 points.
Chen Feng, chairman of HNA Group, has said that the group aims to become the world's seventh-largest carrier in five years, with revenue forecast to reach 36 billion yuan this year and 80 billion yuan to 100 billion yuan in five years.
The group's cargo business aims to be a leader in the domestic market within three to five years and it is negotiating a large breakthrough project, Chen said recently.