Himalaya Harbinger, Rudrapur Bureau
Cathay Pacific Airways Ltd. will buy back the shares owned by Qatar Airways after the Middle Eastern airline decided to unwind a holding that it held for the past eight years.
Hong Kong-based Cathay will buy back Qatar’s 9.57% holding for a total consideration of HK$6.97 billion ($896 million), Cathay Pacific said in a stock exchange filing. The deal will need to be approved by at least 75% of its shareholders.
Qatar Airways first announced the foray in late 2017, part of a broader strategy to buy stakes in major carriers like British Airways owner IAG SA and South American carrier Latam Airlines Group SA. The move marked the first ever investment by a Middle Eastern airline in an East Asian carrier, and made the Doha-based company the third-largest shareholder in Cathay.
“The buy-back reflects our strong confidence in the future of the Cathay Group,” Patrick Healy, Cathay Group’s chairman, said in a statement. “We are firmly focused on sustainably growing our business to strengthen Hong Kong’s status as a world-class aviation hub.”
As a result of the transaction, Cathay’s share of publicly traded stock will fall to about 20.53%, below the minimum prescribed percentage of 25%, the company said. The airline said it’s been granted a so-called public float waiver by Hong Kong stock exchange for the lower free float.
Qatar Airways said the decision to sell was part of a “proactive strategy to optimise our investments and position the group for long-term growth,” and that it would continue to partner with Cathay through the Oneworld alliance, of which the two carriers are members.
Qatar has focused recently on buying holdings in smaller airlines, including Australia’s Virgin Australia Airlines Pty, a 25% stake in South Africa’s SA Airlink Pty and the pending purchase of 49% of Rwanda’s RwandAir.
