China Southern Airlines (CZ, Guangzhou) parent firm China Southern Air Holding has announced it will shortly embark on a shareholder diversification drive.

According to a group statement issued on Saturday, July 20, during a signing ceremony in Beijing on July 20, three province and city-level state-owned entites - the Guangdong Hengjian Investment Holding Co. (owned by Guangdong Province), the Guangzhou Urban Construction Investment Group Co. (owned by the Guangzhou municipality), and the Shenzhen Penghang Equity Investment Fund (owned by the Shenzhen municipality) - agreed to each inject CNY10 billion yuan (USD1.453 billion) into the airline holding as part of the country’s efforts to diversify ownership structures among state-owned firms.

Chairman Wang Changshun said in a statement that the capital increase will be mainly used to develop the airline's core business by expanding its fleet and network while at the same time, improve the company’s debt-to-asset ratio, generate funds for its growth and help modernise its decision-making processes.

It will also use the funds to pay for construction related to China’s Belt and Road Initiative and support aviation development in cities in the southern province of Guangdong.

Once the share sale is complete, China's State-owned Assets Supervision and Administration Commission of the State Council (SASAC), which oversees all state-owned enterprises, will control 61.798% of CSAH, Guangdong's tripartite investment entities will each hold 10.445%, and state pension funds will hold 6.866%.

The change in CSAH's ownership will not affect China Southern Airlines and will remain the airline's largest shareholder. As at February 28, 2019, CSAH controlled 36.92% of China Southern Airlines' shareholding.