Published: Tue, November 07, 2017
Markets | By Erika Turner

Qatar Airways buys 9.6% of Cathay Pacific

Qatar Airways buys 9.6% of Cathay Pacific

Qatar Airways is buying almost 10 per cent of Hong Kong carrier Cathay Pacific Airways for about $662 million, the companies said Monday, in a deal making it Cathay's third-biggest shareholder.

Qatar Airways has entered into an agreement to purchase 378.188 million shares or 9.61 per cent of Cathay Pacific Airways Ltd.

The Middle Eastern carrier said it bought nearly 3.8 million Cathay shares, which represents a 9.6 per cent stake in Hong Kong's biggest airline.

Cathay's shares fell 1.7 per cent to HK$12.98 in afternoon trading after slumping as much as 4.9 per cent in the morning session.

Hong Kong's Kingboard Chemical yesterday said it had sold the stake to Qatar Airways for HK$5.16 billion (S$902 million), making the Middle Eastern carrier the third-largest shareholder in Cathay.

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It's a move that appears to signal the Qatar carrier's confidence in the Hong Kong airline's ability to rebound from its recent financial struggles, largely the result of increasing competition from the Middle Eastern airlines as well as mainland Chinese and low-priced carriers. Qatar, meanwhile, continues to suffer from a diplomatic dispute with Saudi Arabia, the United Arab Emirates, Egypt and Bahrain that has forced it to cease flights to those countries and to fly around those nations' air space.

Cathay Pacific chief executive Rupert Hogg said as members of the Oneworld alliance, "we look forward to a continued constructive relationship".

Cathay shares have risen by 29.4 per cent since the start of January despite the airline in August posting its worst first-half loss in 20 years.

Swire Pacific holds a stake of 45% in Cathay, while Air China has 30%. It added that Qatar's purchase displays confidence in Cathay's future.

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