Hainan Airlines to sell 40% stake in Urumqi Air to Government of Urumqi

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Hainan Airlines Holding, the aviation unit of HNA Group, is to sell a 40% stake in an unprofitable local carrier Urumqi Air to the government of Urumqi, in northwest China. Hainan Airlines has agreed to sell its stake to a financial vehicle controlled by Government of Urumqi. This sell will boost the government's stake in the airline to 70% while the remaining 30% will be held by Hainan Airlines. 

Hainan Airlines said the transaction would be of long-term benefit to the local carrier based in Urumqi, the capital of the Xinjiang autonomous region. The sale is part of a major asset-restructuring program involving Hainan Airlines and its embattled parent HNA Group, which was until recently one of the mainland’s most aggressive overseas buyers.

Urumqi Air was established in 2013 by Hainan Airlines and the local government with registered capital of CNY 3 billion (US$ 0.43 billion). It posted a loss of CNY 50 million (US$ 7.26 million) in the first half of 2019. The carrier operates routes that connect 33 cities in mainland China.

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