Citic Pacific Ltd, Swire Pacific Ltd and its affiliate Cathay Pacific Airways Ltd have agreed to sell their 40 percent stake in Hong Kong Air Cargo Terminals Ltd (Hactl), the city's largest air-freight handler, for HK$2.56 billion.

Hactl's other existing shareholders including Hutchison Whampoa Ltd and Jardine Matheson Group will acquire the stakes from the sellers, a joint statement filed by the companies with the stock exchange Tuesday said.

The purchasers also include Wharf (Holdings) Ltd and China National Aviation Corp (Group) Ltd, which is an affiliate of Air China Ltd, the largest carrier in the Chinese mainland.

The buyers will increase their Hactl stakes "on a pro rata basis," they said in an e-mailed statement.

Jardine Pacific Ltd currently is the largest Hactl shareholder with a 25 percent stake, while Wharf and Hutchison both own 12.5 percent and China National Aviation holds 10 percent.

Citic Pacific and Cathay Pacific will both sell their entire stake of 10 percent each in Hactl for around HK$640 million, while Swire Pacific will sell its entire 20 percent stake for HK$1.3 billion.

Swire Pacific will make a profit of about HK$826 million, and Cathay expects a HK$329 million profit, while Citic will likely make a profit of HK$413 million.

In 2009, the net profit attributable to the equity portion of the 40 percent Hactl stake was approximately HK$311 million.

Cathay pledged to sell the Hactl stake when it won approval to build a new cargo terminal in March 2008. It expects to open the HK$5.5 billion cargo terminal at Hong Kong airport, the world's second busiest for freight, in 2013 after delaying work during last year's global recession.

Cathay, 42 percent-owned by Swire, wants its own cargo-handling facility to cut costs as increasing competition from Singapore Airlines Ltd, FedEx Corp and other air-cargo carriers crimp margins.

"The new cargo terminal represents a significant investment in Hong Kong," Swire Pacific and Cathay Pacific Chairman Christopher Pratt said an in e-mailed statement Tuesday.

It's "a clear commitment to continuing to develop the city as one of the world's most important international air-freight hubs," he said.

Cargo volume at Hong Kong airport jumped 38 percent from a year earlier in April as the economic rebound revives trade. Meanwhile, worldwide international air-cargo traffic grew 28 percent in March, according to the International Air Transport Association.

China Daily/Bloomberg News

(HK Edition 05/26/2010 page3)