Hainan Airlines sells 40% stake in local carrier to Urumqi government

Hainan Airlines Holding, the flagship aviation unit of Chinese conglomerate HNA Group, is to sell a big chunk of its stake in an unprofitable local carrier to the government of Urumqi, in northwest China. The mainland’s fourth biggest airline has agreed to sell 40 per cent of its shares in Urumqi Air to a financing vehicle controlled by the city’s government, according to an exchange filing on Wednesday. The agreement will boost the Urumqi government’s stake in the local carrier to 70%, while Hainan Airlines holds the remaining 30%. Hainan Airlines said the transaction would be of long-term benefit to the local carrier based in Urumqi, the capital of the Xinjiang autonomous region. The sale is part of a major asset-restructuring programme involving Hainan Airlines and its embattled parent HNA Group, which was until recently one of the mainland’s most aggressive overseas buyers. In May, the Hainan-based airline, in which US billionaire George Soros was among early investors, said control of the Shanghai-listed company could change hands as the parent revamped its assets. Hainan Airlines did not reveal the price for the stake, but said it could be paid for by cash, tangible assets or equities.<br/>