China Southern Airlines’ parent company is getting a big cash injection of 30 billion yuan (US$4.36 billion) which will go toward overseas route expansion.
In a filing to the Hong Kong stock exchange, China Southern said three investors – Shenzhen Penghang Equity Investment Fund Partnership, state-backed Guangdong Hengjian Investment Holding and Guangzhou City Construction Investment Group – will each invest 10 billion yuan.
It is part of a move to diversify equity in the state-owned business as instructed by the Chinese government.
The injection will improve its debt-to-asset ratio but will still effectively remain a state-owned enterprise, the filing said.
Wu Guoxiang, China Southern’s international and corporate relations SVP, says the airline aims to be the world’s biggest within five years.
The current world largest carrier American Airlines has a minority stake in China Southern, as does Qatar Airways.
Wu said the airline doesn’t plan to join any global airline alliance until at least 2021, after exiting Skyteam several months ago.
It handled 8% more passengers in the first six months of the year compared to 2018.
