China Eastern Airlines Corp Ltd said it planned to issue up to 8.8 billion yuan ($1.4 billion) worth of corporate bonds in China, raising capital to fund the purchase of aircraft and to re-finance bank loans at a lower cost.
In a filing to the Hong Kong bourse late on Tuesday, the airline, one of China’s top three carriers, said the bonds will have a maturity of up to 10 years. The proceeds will also be used to optimise financing and for working capital.
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China Eastern Airlines aims to cut its debt-to-assets ratio to below 70 percent by the end of 2015 from its current 81 percent, its chair said this week, amid a new round of capital injections by China’s government to support the aviation industry.
Shares of China Eastern Airlines in Hong Kong have fallen 7.2 percent so far this year, compared with a 2.4 percent gain in the benchmark Hang Seng Index.