FILE - In this Jan. 15, 2015, file photo, a new Qatar Airways Airbus A350 approaches the gate at the airport in Frankfurt, Germany. Qatar Airways is buying nearly 10 percent of Hong Kong carrier Cathay Pacific Airways for about $662 million, the companies said Monday, Nov. 6, 2017, in a deal making it Cathay's third biggest shareholder. (AP Photo/Michael Probst, File)
November 06, 2017 - 1:03 AM
HONG KONG - Qatar Airways is buying nearly 10 per cent 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 per cent stake in Hong Kong's biggest airline.
Hong Kong conglomerate Swire Pacific owns 45 per cent of Cathay, state-owned Air China has 30 per cent 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.
The investment adds to Qatar Airways' overseas portfolio. The company also owns 20 per cent of International Airlines Group, which controls European carriers Aer Lingus, Iberia and Vueling; 10 per cent of Chile's Latam Airlines Group; and 49 per cent of Meridiana, Italy's second-biggest carrier.
Cathay shares fell 1.5 per cent on Monday, while the benchmark Hang Seng Index finish nearly unchanged.
News from © The Associated Press, 2017