In an extraordinary meeting this Monday, Cathay Pacific’s shareholders approved a US$5billion plan, which would include the sale of preference shares and a rights issue. The airline, which is one of the biggest of its sector in the Asia-Pacific region, has been put under huge financial pressure recently after social and political instability, as well as the coronavirus pandemic, have severely reduced passenger numbers.
After the rescue plan was revealed last month, Cathay Pacific’s chairman commented that it was the only way to prevent the airline from collapse as travel restrictions worldwide had close to zeroed international travel. With the ambition to help the airline maintain its position as one of the biggest carriers in the region, the company’s principal shareholders Air China Ltd., Swire Pacific Ltd., and Qatar Airways, backed up the plan from the beginning. In the voting that took place on Monday, all resolutions passed.
A Cathay Pacific 777-300ER landing at Singapore Changi Airport. Photo by Benjamin Liew | AeroNewsX
The rescue plan will include the sale of HK$19.5 in preference shares as well as HK$1.95 billion of warrants to the Hong Kong government, which will now own 6.08% of the company. Cathay Pacific expects to obtain a further HK$11.7 billion from the rights issue, and the Hong Kong government will be extending a HK$7.8 billion bridge loan through an entity called Aviation2000, which will also be the one with stakes in the airline.
On an interview with the South China Morning Post, Patrick Healy, Cathay Pacific’s Chairman, mentioned that now that the shareholder’s support had been earned, the company would focus on restructuring the airline, which will include a revising of “the company’s structure, network, fleet and impact on the team and organization.”