Temasek Looks To Buy Stake In Hong Kong Airlines

Singapore state investor Temasek Holdings has expressed interest in buying into Hong Kong Airlines and Hong Kong Express Airways, both owned by mainland's troubled conglomerate HNA Group.

The Singaporean investor would likely emerge as only a minority holder in the airlines if a deal is completed, which will give them accesses valuable slots at the busy Hong Kong International Airport.

Temasek and the debt-laden HNA, an aviation-to-financial services conglomerate, last week signed a memorandum of understanding to explore business partnerships in aviation and logistics.

A second source familiar with the matter said HNA is looking to raise funds for the Hong Kong airlines and Temasek is a potential investor.

Buying into the Hong Kong airlines would help Temasek get an aviation foothold closer to mainland China, in a market dominated by Cathay Pacific.

Temasek is the majority shareholder in Singapore Airlines, which sources said was not associated with the potential investment in the Hong Kong airlines. Temasek, HNA and Singapore Airlines declined to comment.

Hong Kong Airlines and HK Express representatives said their respective airlines would not comment on “market rumours”.

Corrine Png, the chief executive of Crucial Perspective, a transport research firm, estimated that Hong Kong Airlines would be valued at around US$1.1 billion and HK Express at around US$300 million.

The pair combined have about a 10 percent market share at Hong Kong International Airport, she said. (Reuters)