Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

Cathay Pacific unveils US$5 bn bailout plan

Cathay Pacific unveils US$5 bn bailout plan

The airline announced a proposal to inject liquidity and keep it afloat with the help of Hong Kong's government
Cathay Pacific announced a HK$39 billion (US$5 billion) government-led bailout plan on Tuesday as it battles a crippling downturn caused by the coronavirus.

Like many airlines hammered by the crisis, the Hong Kong carrier has seen passenger numbers all but evaporate in recent months leaving most of its fleet sitting on the tarmac and the company hemorrhaging cash.

The firm was already under pressure, after taking a hit from the impact of months of sometimes violent protests in Hong Kong last year that saw passenger numbers plunge.

On Tuesday the airline announced a sweeping proposal to inject liquidity and keep it afloat with the help of Hong Kong’s government.

“Cathay Pacific has explored available options and believes that a recapitalization is required to ensure it has sufficient liquidity to weather this current crisis,” Cathay said in a statement to the city’s stock exchange.

The bulk of the new capital will come from new shares issued to Aviation 2020, a company owned by the Hong Kong government, as well as a HK$7.8 billion bridge loan from the government.

Under the proposal, it will raise about HK$11.7 billion in a rights issue on the basis of seven rights shares for every 11 existing shares held, while preference shares for the government would raise HK$19.5 billion and warrants would garner HK$1.95 billion, subject to adjustment.

The South China Morning Post reported that it is the first time Hong Kong’s government has directly injected money into a private company.

Share trading in Cathay Pacific – and its two biggest shareholders Air China and Swire – was suspended in Hong Kong on Tuesday morning ahead of the announcement. They will resume trading on Wednesday, Cathay said.

Swire, a Hong Kong and British conglomerate with colonial-era roots, has a 45% stake in Cathay, while Air China owns 30%.

Hong Kong’s government will hold a news conference on Tuesday afternoon, followed by Cathay.

In its statement, Cathay said it also plans to implement a further round of executive pay cuts and a second voluntary unpaid leave initiative for employees.

Before the pandemic struck Cathay was one of Asia’s largest international airlines and the fifth largest air cargo carrier globally.

The virus has caused a collapse in passengers and while its cargo business has kept going, Cathay has no domestic demand to fall back on, unlike many other big airlines.

It lost $580 million in the first four months of the year.

Cathay also found itself punished by Beijing last year when some of its 33,000 employees expressed support for Hong Kong’s pro-democracy protests.
AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
Emails Leaked: How Passenger Luggage Became a Side Income for Airport Workers
Polish MEP: “Dear Leftists - China is laughing at you, Russia is laughing, India is laughing”
Western Europe Records Hottest June on Record
BRICS Expands Membership with Indonesia and Ten New Partner Countries
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
China’s Central Bank Consults European Peers on Low-Rate Strategies
France Requests Airlines to Cut Flights at Paris Airports Amid Planned Air Traffic Controller Strike
Poland Implements Border Checks Amid Growing Migration Tensions
Emirates Airline Expands Market Share with New $20 Million Campaign
Amazon Reaches Milestone with Deployment of One Millionth Robot
Yulia Putintseva Calls for Spectator Ejection at Wimbledon Over Safety Concerns
House Oversight Committee Subpoenas Former Jill Biden Aide Amid Investigation into Alleged Concealment of President Biden's Cognitive Health
Amazon Reaches Major Automation Milestone with Over One Million Robots
Extreme Heat Wave Sweeps Across Europe, Hitting Record Temperatures
Meta Announces Formation of Ambitious AI Unit, Meta Superintelligence Labs
Robots Compete in Football Tournament in China Amid Injuries
China Unveils Miniature Insect-Like Surveillance Drone
Marc Marquez Claims Victory at Dutch Grand Prix Amidst Family Misfortune
Germany Votes to Suspend Family Reunification for Asylum Seekers
Budapest Pride Parade Draws 200,000 Participants Amid Government Ban
Southern Europe Experiences Extreme Heat
Xiaomi's YU7 SUV Launch Garners Record Pre-Orders Amid Market Challenges
Jeff Bezos and Lauren Sanchez's Lavish Wedding in Venice
Russia Launches Largest Air Assault on Ukraine Since Invasion
Massive Anti-Government Protests Erupt in Belgrade
Iran Executes Alleged Israeli Spies and Arrests Hundreds Amid Post-War Crackdown
Hungary's Prime Minister Criticizes NATO's Role in Ukraine
EU TO HUNGARY: LET THEM PRIDE OR PREP FOR SHADE. ORBÁN TO EU: STAY IN YOUR LANE AND FIX YOUR OWN MESS.
Hungarian Scientist to Conduct 30 Research Experiments on the International Space Station
NATO Members Agree to 5% Defense Spending Target by 2035
NATO Leaders Endorse Plan for Increased Defence Spending
U.S. Crude Oil Prices Drop Below $65 Amid Market Volatility
International Astronaut Team Launched to Space Station
Macron and Merz: Europe must arm itself in an unstable world
Germany and Italy Under Pressure to Repatriate $245bn of Gold from US Vaults
Iran Intensifies Crackdown on Alleged Mossad Operatives After Sabotage Claims
Trump Praises Iran’s ‘Very Weak’ Response After U.S. Strikes and Presses Israel to Pursue Peace
Oil Prices Set to Surge After US Strikes Iran
BA and Singapore Airlines Cancel Dubai Flights Amid Middle East Tensions
Trump Faces Backlash from MAGA Base Over Iran Strikes
Meta Bets $14 B on Alexandr Wang to Drive AI Ambitions
FedEx Founder Fred Smith, ‘Heart and Soul’ of the Company, Dies at 80
Chinese Factories Shift Away from U.S. Amid Trump‑Era Tariffs
Pimco Seizes Opportunity in Japan’s Dislocated Bond Market
Labubu Doll Drives Pop Mart to Status as China’s Most Valuable Toy Maker
Global Coal Demand Defies Paris Accord Goals
United States Conducts Precision Strikes on Iran’s Nuclear Sites
US strikes Iran nuclear sites, Trump says
Telegram Founder: I Will Leave My Fortune to Over 100 of My Children
16 Billion Login Credentials Leaked in Unprecedented Cybersecurity Breach
×