China Eastern Airlines increases equity in catering arm

China Eastern Airlines and its controlling shareholder, CEA Group, will pump CNY1.5b yuan (US$217.4m) into their airline catering arm to improve that entity's financial security help it manage the impact of Covid-19. In a December 30, 2022, filing with the Hong Kong Stock Exchange, China Eastern said it would contribute CNY675m (US$97.8m) to Eastern Air Catering Investment, Ltd, and the CEA Group would contribute a further CNY825m (US$119.6m). China Eastern Airlines presently has a 45% stake in the catering business and the CEA Group has a 55% stake. After the capital increase, the proportion of those stakes will remain unchanged however the registered capital of Eastern Catering will increase to CNY2.16b (US$313.1m). The filing said the capital, to be paid in cash within 21 days of the capital increase agreement taking effect, will "optimise assets structure, lower gearing ratio, improve corporate credit, as well as enhancing financial security and anti-risk capabilities."<br/>