Airlines Ltd., China's
biggest state-owned carrier by number of passengers, said Tuesday it's raising
up to 2 billion yuan (US$314 million) to help pay off debt amid a shaky global
economic outlook and high jet fuel prices.
which is listed on Hong Kong's stock market,
plans to sell about 465.1 million new shares to its parent company, China
Southern Air Holding Company, at 4.30 yuan each.
The money would
be used to repay bank loans, with any left over added to working capital. The
share issue still needs regulatory and shareholder approval, the company said
in a statement to the stock exchange.
The share sale
follows two similar capital injections, in 2008 and 2010, that raised about 4.5
billion yuan in total for the airline.
have been expanding their fleets rapidly in recent years to keep up with
surging demand for air travel in booming Asia,
but that's also left them with rising debt.
Net debt at China Southern,
one of the country's three major state-owned carriers, rose 18 percent to 75.8
billion yuan ($11.9 billion) last year. The airline's fleet of 444 aircraft is
the country's biggest and it has spending commitments of 61.2 billion yuan ($9
billion) for 180 more aircraft to be delivered through 2016.
comes as airlines struggle to survive amid high fuel prices. The International
Air Transport Association warned this week that Europe's
debt crisis would drag down airline profits if it triggers a recession.
aviation trade group said fuel accounts for 33 percent of carriers' costs, up
from 13-14 percent a decade ago, and it forecast that oil prices will average
$110 a barrel this year.
China Southern is
based in the southern business center of Guangzhou.