Grand China Air, parent of Hainan Airlines, may have to stop its US$1 billion initial public offering in Hong Kong after two sponsors were said to have withdrawn.
UBS and Guotai Junan Capital have dropped plans to help Grand China Air, one of whose shareholders is United States billionaire George Soros, seek a listing in Hong Kong due to its weak balance sheet, the South China Morning Post quoted sources as saying.
The Hong Kong-based newspaper said the carrier's third sponsor, Goldman Sachs, may also leave as trying to sell the IPO will be tough in the current economic climate.
A spokesman at HNA Group, a shareholder of Grand China Air, told Shanghai Daily yesterday that he had no idea about the issue so far.
Grand China Air, which has a US$1.3 billion debt due to be repaid in November, is managed under a parent company called Grand China Airlines Holding Company which is held jointly by the Hainan provincial government with 48.6 percent, Soros with 18.6%, and the HNA Group with 32.8%.
(Shanghai Daily June 30, 2009)