(Reuters) -State-owned Qatar Airways has decided to sell its entire stake in Cathay Pacific Airways for about $897 million (HK$6.97 billion), marking its complete exit from Hong Kong’s flagship airline.
Cathay said on Wednesday it will repurchase Qatar Airways’ entire 9.57% shareholding for HK$10.8374 per share, roughly a 4% discount to the last closing share price.
The Gulf carrier had purchased the stake in November 2017 from Hong Kong’s Kingboard Chemical Holdings, making it the third-largest shareholder in Cathay. It was Qatar Airways’ first major investment in an Asian airline and was aimed at boosting its global influence and increasing traffic through its Doha hub.
Qatar Airways CEO Badr Mohammed Al-Meer said the exit reflects the company’s disciplined portfolio strategy and follows a period of strong results, allowing the company to optimise investments and position itself for long-term growth.
The Middle Eastern carrier has pursued a strategy of investing in airlines worldwide to strengthen its competitive position; these investments include a stake in IAG.
Cathay’s group chair, Patrick Healy, said the stake buyback reflects “strong” confidence in the company’s future. The airline has laid out an investment plan of HK$100 billion over seven years that includes fleet renewal, cabin products and lounges.
Cathay and Qatar Airways said they would continue their partnership through the oneworld Alliance.
($1 = 7.7675 Hong Kong dollars)
(Reporting by Rajesh Kumar Singh in Chicago and Rishav Chatterjee and Sherin Sunny in Bengaluru; Editing by Shreya Biswas and Leslie Adler)
