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Taiwan’s China Airlines to cancel shares to help boost stock price

A file photo of a China Airlines plane. China Airlines Ltd., which posted a record loss in 2008, will retire 30.7 percent of its shares to boost share...

A file photo of a China Airlines plane. China Airlines Ltd., which posted a record loss in 2008, will retire 30.7 percent of its shares to boost share...

China Airlines Ltd., which posted a record loss in 2008, will retire 30.7 percent of its shares to boost shareholder value.

The airline, Taiwan’s largest carrier, said its board approved the plan to cancel 1.49 billion shares and reduce capital to NT$33.7 billion ($1 billion), according to a statement to the stock exchange last night. It didn’t say if the equity to be canceled is treasury stock or if the airline plans to buy back shares.

China Airlines also plans to sell as much as NT$10 billion of bonds in a private placement, it said in a separate statement. The sale will include 3-year bonds paying 3.4 percent interest and 5-year bonds with a coupon of 3.6 percent. Chinatrust Commercial Bank will manage the sale.

Both plans are subject to shareholder approval at a meeting to be held May 18, the company said.

China Airlines reported a 2008 net loss of NT$32.4 billion, or NT$7.11 a share, compared with a loss of NT$2.52 billion a year earlier.

China Airlines joins carriers, including Cathay Pacific Airways Ltd. and China Eastern Airlines Corp., in reporting hedging losses after fuel prices dropped. The economic recession have also discouraged business and leisure travel, prompting airlines to reduce flights.

China Airlines had a loss of NT$21.1 billion because of wrong bets on fuel prices. Prices slumped 51 percent in the fourth quarter.


Updated : 2021-10-28 06:51 GMT+08:00