Cathay Pacific Airways to Buy Back HK$1.53 Billion in Warrants From Hong Kong Government
Hong Kong’s flag carrier, Cathay Pacific Airways, has announced a buyback agreement of over HK$1.53 billion in warrants that were issued to the government as part of a pandemic bailout package. This move comes after the company repurchased 50% of preference shares valued at HK$9.75 billion last month.
Cathay Group CEO, Ronald Lam Siu-por, expressed confidence in the company’s financial results for the first half of 2024, leading to this decision. The recapitalization in 2020 was crucial for Cathay’s survival amidst a challenging industry landscape due to the global pandemic.
The buyback agreement aims to prevent dilution of Cathay’s shares and will be funded by existing financial resources without affecting investment plans. The government’s investment in Cathay Group through preference shares and a bridging loan was part of a HK$39 billion recapitalization package to support the airline during the travel market collapse.
This strategic buyback, along with preference share dividends, demonstrates Cathay’s commitment to financial stability and recovery. The government’s bailout package played a vital role in safeguarding Hong Kong’s position as an international aviation hub amid unprecedented challenges posed by Covid-19.
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