CHINA EASTERN SEEKS ADVICE ON EQUITY SALE

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China Eastern Airlines, the smallest and weakest of the country's three big state-owned carriers, said yesterday it was seeking government advice over the long-awaited sale of a stake to strategic investors including Singapore Airlines (SIA).

The Chinese airline said it was in talks with authorities about removing “the restrictions imposed by laws and regulations and the state policies on the introduction of strategic investors”.

SIA, which suggested last July that it was in talks with China Eastern about taking an equity stake, has said it was discussing co-operation but made no decision to pursue any other relationship.

Analysts, however, say both sides are anxious to complete a deal that would give SIA greater access to the tantalising Shanghai market in return for helping restructure China Eastern. But they say negotiations have been drawn out because of a disagreement over what the state-owned Chinese airline is worth.

Bankers involved in the deal said the proposed price for a 20-25 per cent stake in the carrier had increased from an estimated $500m to more than $800m in the past year, thanks to a big spike in the company's Shanghai-listed share price.

China's extended bull run helped the airline's shares double in the year to April 20 when the company announced a Rmb3.3bn ($430m) loss for 2006.

Instead of falling on the news, China Eastern's renminbi-denominated shares have risen 46 per cent since then and are trading at a 160 per cent premium over their Hong Kong-listed shares.

“At that price it will probably be impossible to convince SIA shareholders to buy a non-controlling stake in China Eastern,” said Shirley Lam, transportation analyst at BNP Paribas.

Chinese government rules require strategic investors to pay no less than a 10 per cent discount to the 20-day average closing mainland share price over the previous 20 trading days. But with the Shanghai market as high as it is, analysts say the Singaporean side has proposed buying new shares issued in Hong Kong at their much lower price.




中国东方航空(China Eastern Airlines)昨日表示，正就人们等待已久的向新加坡航空(Singapore Airlines)等战略投资者出售部分股权一事，向政府寻求建议。在中国3大国有航空公司中，东航规模最小，实力也最弱。

东航表示，正与政府有关部门进行谈判，试图消除“关于引进战略投资者的法律法规和国家政策限制”。

去年7月，新加坡航空曾暗示，正与东航就购入东航部分股权进行谈判。新加坡航空昨日表示，正在与东航商谈合作问题，但未就寻求其它关系做出任何决定。
然而，分析人士表示，双方都急于完成一项交易。如果交易成功，新加坡航空将更大程度地参与诱人的上海航空市场，以此作为帮助东航进行重组的回报。但他们表示，由于双方在东航估值方面存在分歧，谈判已被拖延。

参与这项交易的银行家表示，由于过去1年中东航上海A股价格大幅冲高，购入东航20%至25%股权的拟议收购价格已从约5亿美元，升至逾8亿美元。

截至4月20日，中国股市的长期牛市帮助东航股价在一年中上涨一倍。该公司当日宣布，2006年亏损33亿元人民币(合4.3亿美元)。

自该消息公布以来，东航的A股股价不但没有下跌，反而已上涨46%，较其在香港上市的股票价格有160%的溢价。

巴黎银行(BNP Paribas)交通业分析师Shirley Lam表示：“以目前股价衡量，或许不太可能说服新加坡航空股东购入东航非控股股权。”

根据中国政府规定，战略投资者的收购折价，不得大于被收购公司前20个交易日A股平均收盘价的10%。然而，分析师表示，鉴于目前上海股市高涨， 新加坡航空已提出以低得多的价格，购入东航在香港发行的新股。