Hong Kong
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Qatar Airways will sell its stake in Cathay Pacific Airways for $896 million, ending its eight-year shareholding in Hong Kong’s flagship carrier.
The Doha-based airline approached Cathay about selling its entire 9.6% holding, which Cathay will buy back at $1.4 per share – subject to the approval of its independent shareholders, according to its Wednesday filing.
The state-owned flag carrier of Qatar became Cathay’s third-largest shareholder in 2017 when it acquired the stake from Hong Kong-based Kingboard Chemical Holdings and other companies for $662 million. The purchase was the first investment by a Middle Eastern carrier in an East Asian airline.
“Following a period of record profitability and strong performance, this decision is part of a proactive strategy to optimise our investments and position the group for long-term growth,” said Qatar Airways CEO Badr Mohammed Al-Meer in a statement released by Cathay on Wednesday.
Upon the completion of the buyback, the holdings of Cathay’s two largest shareholders, Swire Pacific and Air China, will increase to 47.7% and 37.8%, respectively.
Cathay’s chairman Patrick Healy said the buyback reflects the company’s “confidence” in its future, stressing its commitment to growth through a $12.9 billion investment in its fleet and lounges over the course of seven years, as announced last year.
Cathay and Qatar said they will continue to collaborate through existing codeshare and alliance agreements. Both airlines are members of Oneworld, one of the three major global airline alliances.
Qatar Airways has invested in multiple airlines around the world over the last decade. In 2019, it purchased a 5% stake in China’s largest carrier, China Southern Airlines, shares it continues to retain. The Qatari company also owns a 25% share of the International Airlines Group, the parent of British Airways, Spain’s Iberia, Ireland’s Aer Lingus and other, lower-cost carriers.
Earlier this year, it bought a 25% stake in Virgin Australia, and it is in the final stages of completing a 49% equity investment into Rwandan flag carrier RwandAir.