Air China aims to raise up to RMB12 billion (approx: US$1.93 billion) in a private offering of up to 994 million shares to no more than 10 investors at about RMB12.12 per share. China National Aviation Holding Company will subscribe 82.85 million shares for one billion RMB (approx: US$161 million) at RMB12.07 per share.
Air China said the funds raised from the private offering will be used to purchase 15 Boeing B787 aircraft as well as to upgrade its direct sales ecommerce operations, outfit its aircraft with onboard Wi-Fi and boost its cash reserves.
Air China plans to fork out a total of RMB24 billion (approx: US$3.86 billion) for the 15 B787, branded “Dreamliner” and feature a 63-meter long fuselage and 60-meter wingspan to accommodate 250 to 290 passenger seats. About RMB7.45 billion (approx: US$1.19 billion) of the funds raised in this offering will be allocated towards the down payment for the planes, each carries a price tag of US$257 million.
Air China said when the new planes are put into operation, they will boost its transportation capacity and contribute RMB7.215 billion (approx: US$1.16 billion) to its annual revenue.
Air China said it will work on increasing the carrier’s direct sales ratio and cutting operational costs. It will also lay the groundwork for data mining and pioneer inflight internet portals, at the same time improve customer service experience and satisfaction with value-added service to ensure smooth implementation of its strategy. By taking these steps to improve the competiveness of its core operations and brand image, Air China hopes to secure a larger market share while maintaining and improving its profit level. (Translation by David)
