Singapore SIA disappointed over rejection by China Eastern shareholders
SINGAPORE : Singapore Airlines said on Tuesday it was “disappointed” after China Eastern shareholders rejected a deal which would have given SIA a substantial stake in the Chinese carrier.
“Singapore Airlines is disappointed that the proposed transaction involving an equity stake in China Eastern Airlines did not receive the required level of support from independent shareholders at today’s EGM (extraordinary general meeting),” SIA said in a statement.
However, it added it “will continue to support the building of a relationship with China Eastern, noting that the airlines are still mutually willing to develop the relationship”.
China Eastern chairman Li Fenghua told a gathering of shareholders in Shanghai that the deal had been voted down after more than 77 percent had cast their votes against the bid.
Singapore Airlines and investment company Temasek signed a preliminary deal in September to take a 24-percent stake in China Eastern for US$923 million, or HK$3.80 per share.
But China National Aviation Corp (CNAC), the parent of rival airline Air China, on Sunday promised at least HK$5.00 per share for a stake in the Shanghai-based carrier if China Eastern’s shareholders voted down the Singaporean deal.
SIA on Tuesday maintained that its offer represents a “full and fair value for the equity injection to recapitalise” China Eastern, and noted that it had been approved in accordance with relevant laws and regulations.
“The proposal is for a long-term strategic relationship with a willing partner,” SIA said.
“With board and management involvement by Singapore Airlines, the proposal brings international expertise to China Eastern, which will help the airline meet future challenges it will face in a competitive aviation environment in China.”
China Eastern chairman Li regretted that the deal had been voted down and suggested SIA was still in the running as a partner, while Air China was not.
“When it comes to introducing a strategic investor, we will not consider Air China…we still think Singapore Airlines is the best cooperation partner,” Li said in Shanghai.
“It’s not simply the price that I look at. It’s like if you don’t like her, no matter how big the dowry is, it wouldn’t work.”
Trading of SIA shares were suspended Tuesday afternoon at the airline’s request pending the outcome of the voting.
SIA shares last traded at S$16.70 each before the halt, up 18 cents or 1.1 percent from its close of S$16.52 on Monday. - AFP/ch
Source : Channel NewsAsia - 08 Jan 2008
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