After being invested for nearly eight years, Qatar Airways has sold its entire 9.57 per cent stake in Cathay Pacific Airways for approximately US$897 million.
Wall Street Journal reported that Qatar Airways held 643.08 million shares, and Cathay Pacific bought back the entire holding for HK$10.8374 (US$1.39) a share. The sale price represents a 3.9 per cent discount to the Hong Kong airline’s last traded price of HK$11.28 a share.
The two airlines said they would continue their partnership through the OneWorld Alliance.
The Doha-based airline had bought the stake in November 2017, and was the third-largest shareholder in Cathay after Swire Pacific and Air China. If the buyback is approved, Swire Pacific’s stake in Cathay will rise to 47.69 per cent, while Air China’s shareholding will increase to 31.78 per cent.
Patrick Healy, Cathay Group chairman, said: “The buyback reflects our strong confidence in the future of the Cathay Group and underscores our commitment to the development of the Hong Kong international aviation hub.”
After struggling through the COVID Pandemic, Cathay is experiencing strong growth. It is one of Asia’s largest cargo carriers and has benefited from rising volumes of e-commerce out of China.
Cathay Pacific said the deed will only be executed once it obtains approval from at least three-fourths of the votes cast by independent shareholders. Funding for the share buyback will come from internal resources and won’t affect the airline’s operational funding requirements.
Qatar Airways has pursued a strategy of investing in airlines worldwide to strengthen its competitive position, including in British Airways parent IAG, South American carrier LATAM, and Virgin Australia.
Qatar Airways CEO Badr Mohammed Al-Meer said the exit reflected the company’s disciplined portfolio strategy and followed a period of strong results, allowing the company to optimise investments and position itself for long-term growth.
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