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Shanghai Airlines may get 2b yuan injection

Shanghai Airlines, more than 35 percent owned by the Shanghai city government, is expected to get 1 billion yuan ($146 million) to 2 billion yuan injection to trim its debt, said today's Oriental Morning Post.

 

Airline industry experts estimated that the new capital would enable Shanghai Airlines to lower its debt-to-equity ratio to a more manageable 80 percent from 91.35 percent.

 

Shanghai Airlines earlier posted a loss of 414 million yuan in the first three quarters of 2008 and suffered 170 million yuan loss on fuel hedging contracts as of Dec 31, 2008.

 

The carrier predicted that net loss for 2008 will at least double previous year's loss of 435 million yuan because of the downturn in the passenger travel market.

 

Trading in Shanghai Airlines' shares on the Shanghai stock exchange was suspended Thursday. No definite date was set for trading resumption.

 

(China Daily February 6, 2009)