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Okay says new investors will provide 200m CNY capital injection
Published on: 2009-07-09
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Okay Airways Chairman Wang Junjin said the Tianjin-based carrier will add one or two new investors within two months that will provide a capital injection of CNY200 million ($29.2 million) to bolster the troubled airline.
The Tianjin municipal government reportedly is one of the potential investors and is expected to purchase a 40% stake, but Wang refused to confirm this. Okay currently has a registered capital of CNY300 million. Juneyao Group, of which Wang is also chairman, controls a 63% stake while Beijing Dadiqiao Investment Co. and three other individuals hold the remainder.
Asked if the capital injection will dilute Juneyao's holding, Wang said, "It is not important whether we are the controlling stakeholder or not after the capital injection. It's more important for Okay to maintain stable growth."
The carrier was forced to suspend operations Dec. 15, 2008-Jan. 15, owing to conflicts between airline management and Juneyao. Wang admitted the problems remain unresolved, but he insisted that the internal conflicts won't impede the company from attracting new investors. "Okay's stock equity structure will change after we introduce new investors, which will alleviate the conflicts," he said.
However, the problems have had a negative impact on the carrier's safety standards. A CAAC source revealed to ATWOnline that the regulator has told Okay to strengthen its level of safety or face the prospect of having its operations restricted.
Wang rejected the notion that the carrier will have to suspend operations again and claimed that it now enjoys a stable cash flow. He added that it recently resumed cargo services.
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