Rescue of Eastern Airlines: China-owned entities to inject $4.6B
China Eastern Airlines (CIAH) (CEA) will receive a financial injection of $4.6 billion (¥31 billion) from four different state-owned companies as part of the airline’s equity diversification plan. The support should also help the airline to reduce the financial loss suffered since the beginning of the pandemic.
On October 12, 2020, China Eastern Airlines (CIAH) (CEA) announced that it would receive a $4.6 (¥31 billion) billion cash injection from four different investors. The financial injection is part of China’s long-term plans to diversify the ownership structures among state-owned companies.
According to a public filing, Easter Airlines will receive a $1.6 (¥11 billion) billion in cash from Shanghai Jiushi Group, a state-owned investment holding company. Another investor, China Life Investment, a subsidiary of state-owned China Life Insurance, will provide nearly $1.5 billion (¥10 billion) worth of financial support to the airline.
An additional $1.5 (¥10 billion) billion capital injection will be made by the other two state-owned enterprises China Reform Holdings Corporation and China Tourism Group. Both companies will support China Eastern Airlines (CIAH) (CEA) in equal parts by $0.75 billion (¥5 billion).
The financial report showed that China Easter Airlines suffered a net loss of $1.2 billion (¥ 8 billion) operating loss in the first half of 2020 related to the COVID-19 consequences.
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