Haikou airport plans for IPO in HK bourse
( 2002-07-30 11:14 ) (2 )

The Haikou Meilan Airport in South China's Hainan Province is very likely to seek a listing in Hong Kong soon and hopes to have a larger foreign investment involved.

A spokesman with Hainan Airlines, which holds a large share of Meilan Airport, confirmed a report by the China News Agency last week on the expected listing, but declined to give more detailed information.

HSBC Securities Asia Ltd, the underwriter, was quoted by the report as saying that it would introduce strategic investors to Haikou Meilan Airport before it is floated.

Bankers at HSBC Securities could not be reached for comment.

The airport, one of the two airports on Hainan Island, is 30 per cent owned by Hainan Airlines, one of China's major airline companies. Other shareholders include the Hainan International Trust and Investment Co Ltd, the China Aviation Fuel Co Ltd, the Hainan Aviation Holding Group and China Southern Airlines.

Chen Wenli, executive officer of the Hainan Meilan Airport, told Business Weekly that the airport anxiously needs capital support and he did not rule out the possibility of obtaining funds from private sources.

"It is a golden opportunity for domestic aviation companies, including airports, to attract international capital through overseas listings, under the background of a sluggish international aviation industry," said Chen Feng, president of Hainan Airlines.

Hainan Airlines, which has A and B shares listed on the mainland stock exchanges, has opened more than 130 domestic and overseas routes over the past nine years and has a network covering the whole country.

Meilan's financing plan comes at a unusual moment as the airport might become the first to benefit from a recent aviation regulation that promises wider access for foreign investment.

The newly amended industry regulation, which was announced two weeks ago by the General Administration of Civil Aviation of China (CAAC), is to be put into effect in August.

The new regulation modifies the 49 per cent shareholding cap for foreign investment to a vague description, saying Chinese companies just need to hold relatively major shares in such a co-operation.

Under the regulation, the country will also encourage the listing of some domestic airports and airlines on overseas stock markets through the use of foreign capital, said Bao Peide, vice-minister of the CAAC.

Several other airport operators in China have already tapped capital markets for funds, including Beijing Capital International Airport, which has H shares listed in Hong Kong, Shenzhen Huangtian International Airport, Shanghai Hongqiao International Airport and Xiamen Gaoqi International Airport, which have listings on domestic stock exchanges.

As the only domestic one until now listed on the Hong Kong stock market, Beijing Capital International Airport is unlikely to be affected by the report of Haikou Meilan Airport's Hong Kong listing plan, said an official with the securities department of the capital airport.

"About 400 million yuan (US$48.43 million) will be poured into Meilan Airport's expansion project within the coming year," said Chen Wenli, adding that the project will dramatically promote the airport's annual handling capacity to 10 million people.

Haikou Meilan Airport handled a record 5.2 million passengers last year, due to a tourism boom, making it the eighth biggest airport in the country.

The airport made 20 million yuan (US$2.42 million) in profit last year from passengers, more than 20 times the previous year.

The goal of the airport is to become an internationally renowned aviation enterprise within the next nine years, he said.