Air China to vote against SIA-China Eastern deal
2 January 2008
Singapore Airlines' (SIA) deal with China Eastern Airlines could be disrupted by Air China's parent company, which is a minority shareholder, the Wall Street Journal reported. China National Aviation Holding Company (CNAHC) will vote against the deal at a shareholders' meeting on January 8, according to an anonymous source. CNAHC, which has a 12% stake in China Eastern, said in a statement on January 1 that China Eastern and SIA should renegotiate their deal because it was undervalued, "unfair" to investors and could be an obstacle to the development of the domestic airline industry. SIA and Singapore's state investment fund, Temasek, had agreed to buy a 24% stake in China Eastern for US$923.8 billion in September. But the deal must be approved by holders of at least two-thirds of China Eastern's outstanding shares in both Hong Kong and Shanghai. Air China, which owns a 17.5% stake in Cathay Pacific Airways, aborted an attempt to buy a stake in China Eastern earlier but has continued to express opposition to the Singaporean buy-in. Air China's chairman Li Jiaxing was made chief of China's civil aviation regulator on December 29.
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