China Eastern Airlines (MU, Shanghai Hongqiao) has completed the issuance of A shares after a non-public capital raising that targeted specific shareholders. In a January 13, 2023, filing with the Hong Kong Stock Exchange (HKEX), the airline's holding company, China Eastern Airlines Corporation Limited, said the share issuance was completed on January 12.
According to the filing, 3,416,856,492 ordinary A shares were issued. The issue price was CNY4.39 yuan (USD0.65) per share, with each share having a nominal value of CNY1 (USD0.15). Notes attached to the filing reveal CEA Holdings increased its shareholding in the airline by 1,138,952,165 A shares. That entity now holds a 52.89% stake in China Eastern Airlines, comprising both A and H shares. What China Eastern termed "public shareholders" acquired the other 2,277,904,327 A shares. Public shareholders hold the remaining 47.11% of the airline.
ch-aviation recently reported that 20 companies were on the approved list to purchase shares, including Swiss-based investment bank UBS who received 358,314,350 shares. UBS is now the second largest shareholder in China Eastern Airlines. Other entities asked to participate include China National Aviation Fuel Group, GF Fund, Nord Fund, and China Europe Fund.
The capital raising generated CNY15 billion (USD2.24 billion), with those 3,416,856,492 new shares constituting 24.94% of the previous existing issued share pool. The shares were issued at an 18.1 % discount to the then-prevailing market price. China Eastern Airlines has previously said it intends to use the funds raised to acquire up to 38 new aircraft and increase its day-to-day working capital reserves. Those additional aircraft include twenty-four ARJ21-700s, six A350-900s, four C919s, and four B787-9s.
