Singaporean state-owned wealth fund Temasek Holdings is eyeing a stake in Hong Kong Airlines (HX, Hong Kong International) and HK Express (UO, Hong Kong International) subject to an ongoing due diligence process, following a Memorandum of Understanding (MoU) signed between the investor and HNA Group earlier in April, Reuters has reported.
The Singaporean investor would most likely only acquire a minority stake in the Hong Kong-based carriers.
Due to the opaque ownership structure of the debt-ridden HNA Group it is unclear how big the conglomerate's stakes are in either Hong Kong Airlines or its subsidiary Hong Kong Express. In January, Hainan Airlines, which is controlled by HNA Group and is the major airline asset in the conglomerate's portfolio, said it has transferred a 55% stake in Hong Kong Airlines to an independent third party, Cayman Islands-based Frontier Investment Partner.
Hong Kong Airlines Chief Financial Officer (CFO) Jacky Luo also said in January that Hainan Airlines retains a 27% stake in the carrier, but HNA Group does not provide any financing for it anymore.
In 2016, Hong Kong Airlines owned a 66% stake in HK Express with the remainder of shares held mostly by other HNA-affiliated entities.
For its part, Temasek Holdings is the majority shareholder of Singapore Airlines, which is reportedly not associated with the fund's talks with Hong Kong Airlines. The fund also used to be a shareholder in Jetstar Asia Airways prior to selling its stake in 2009. Temasek Holdings also unsuccessfully pursued a stake in China Eastern Airlines in 2008.
