Hong Kong Airlines (HX, Hong Kong International) has deferred a planned dual currency IPO with reports in the Wall Street Journal claiming it is in talks to sell a stake in itself to an undisclosed strategic investor.
The newswire reports the carrier's application to the Hong Kong stock exchange, filed in September last year, has now lapsed after it failed to secure a hearing with the bourse's listing committee.
In the event a sale is agreed to with the other party, said to be another airline, Hong Kong Airlines would be forced to wait an additional seven months before going public as required by local investment laws.
Based in both Chinese Yuan (CNY) and Hong Kong Dollars (HKD), the regional Asian carrier had planned to use the IPO to raise the equivalent of USD600 million in fresh capital for use in funding its fleet expansion requirements and to retire debt.
While the Hainan Airlines (HU, Haikou) subsidiary does plan to grow its fleet from the current 29 aircraft, to 54 by the end of 2018, its potential has been limited by Hong Kong’s Civil Aviation Department (CAD) which has restricted the airline's AOC to a maximum of seventeen A330s and eight A320s. The carrier, however, has been able to avoid these limitations by transferring additional aircraft to the AOC of its budget subsidiary, HK Express (UO, Hong Kong International).
