Air China Cargo (CA, Beijing Capital) is set to undergo a share capital increase which, once completed, will see the introduction of several new shareholders. As previously reported, the freight specialist is in the process of expanding its business scope to include logistics capabilities.
A stock market filing said that, on November 9, existing owners the China National Aviation Holding Corporation, Cathay Pacific China Cargo, Fine Star Enterprises, and other investors had agreed to increase the carrier's registered capital by CNY3.314 billion yuan (USD504.18 million) to CNY10.69 billion (USD1.626 billion).
At present, China National Aviation Holding Corporation owns 65.22% of Air China Cargo while Cathay Pacific China Cargo owns 17.74% and Fine Star Enterprises 17.04%. However, once the increase has been completed, Shenzhen International (an indirect wholly-owned subsidiary of Shenzhen International Holdings, an investment holding owned by the Shenzhen Provincial Government and Cheung Kong Holdings) will own 10% while the other investors - Zhejiang Company, GSD Fund, and the ESOP Platform - will own 21%. China National Aviation Holding Corporation's share will decline to 45.0018%, Cathay Pacific China Cargo to 12.24%, and Fine Star to 11.7542%.
Shenzhen International said it will make a capital contribution of CNY1,565,160,572.63 (approximately USD238,137,782.07) to Air China Cargo, of which CNY1,068,952,720 (approximately USD162,640,200.84) will go to the airline's registered capital. The other investors have agreed to make a capital contribution of CNY3,286,837,204 (approximately USD500,089,342.56) in aggregate to Air China Cargo of which CNY2,244,800,713 (approximately USD341,544,421.91) in aggregate will go towards the airline's registered capital.
"Through the capital contributions, Air China Cargo will diversify its shareholding base and implement equity holding by employees, enhance its capital strength, optimise its business structure and enhance its core competitiveness," the filing said. "Air China Cargo will seize the market opportunities of cross-border e-commerce and consumption upgrades in the PRC to become an integrated 'e-commerce+logistics' service provider with integrated capabilities in procurement, transportation, and sales."
The new shareholders bring with them a wealth of opportunities and experience critical to Air China Cargo's future. Shenzhen International specialises in investing in logistics-related infrastructure while Zhejiang Company is a whole-owned subsidiary of Cainiao Network, Alibaba's logistic platform operator. GSD Fund, also known as Tianjin Yuchi Enterprise Management Limited Partnership, is lead by Tianjin Guanchi Enterprise Management Company while ESOP is led by the Guogai Shuangbai Development Fund Management Company which itself is ultimately wholly owned by the Chinese government's state-owned Assets Supervision and Administration Commission.
Air China Cargo owns eight B777-200Fs, three B747-400FSCDs, and four B757-200(PCF)s. It also exclusively manages Air China's belly-hold freight business as well as its cargo terminal operations and ground distribution.
