Hong Kong Airlines International Holdings Ltd. is in talks to sell a stake to a strategic investor.
The proposed sale comes as the short-haul carrier plans to list in Hong Kong in the coming months, the Wall Street Journal reported Wednesday, citing people with knowledge of the deal.
In September, the airline applied to the stock exchange to raise funds in Hong Kong’s first dual-currency initial public offering in yuan and Hong Kong dollar.
The US$500 million IPO, scheduled for the first half, has been delayed by the planned stake sale.
If the company sells a stake to a strategic investor before the IPO, it can’t list for several months, according to Hong Kong rules.
It wasn’t immediately clear who the strategic investor is, but it is likely to be another airline, the report said.
Hong Kong Airlines, which flies to Southeast Asian beach getaways such as Phuket, Thailand, as well as big Chinese cities, declined to comment.
The carrier is controlled by Chinese conglomerate HNA Group which owns a string of assets including hospitality businesses such as Tangla Hotels & Resorts and container-leasing operations.
In 2011, Hong Kong Airlines announced its listing plan but shelved it because of weak markets.
The carrier was set up in Hong Kong in 2006, aiming to break the dominance of bigger rival Cathay Pacific Airways Ltd. and its China-focused unit Dragonair.
But intensifying competition forced Hong Kong Airlines to cut long-haul services to Moscow and London to focus on mainly short-haul regional travel.
The company’s operating a fleet of about 24 Airbus aircraft flies mainly regional routes between Hong Kong and other destinations in Asia including Osaka and Beijing and Shanghai.
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