Hainan Airlines cuts share prices to pay debts

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Hainan Airlines (HU) has reduced the price of its additional share offerings from CNY6.42 per share in the Shanghai Stock Exchange to CNY4.84 per share to raise CNY8 billion ($1.28 billion) to pay off a bank loan of CNY6.08 billion and increase its cash flow.
The debt resulted from the rapid business expansion of its overseas merger and acquisitions (M&A) activities.HU’s bank debt has increased from CNY9 billion in 2008 to CNY 14.8 billion at the end of the 2011 third quarter.
The Haikou-based carrier has slowed down its expansion pace because of the global economic downturn and its heavy financial burden. HU chairman Chen Feng said the airline would cut unnecessary investments to reduce operating expenses. As a result, the carrier, which was considering investing in financially troubled Malev Hungarian Airlines, has suspended negotiations

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