Blue chip continuing strategy of divesting non-core assets
Blue chip conglomerate Citic Pacific has put its stake in Air China Cargo on the block as the company continues a strategy of divesting what it sees as non-core assets.
Citic Pacific, which in June made a profit of HK$2 billion after selling down shares in Cathay Pacific Airways and Hong Kong Dragon Airlines, said it has already held preliminary talks to sell the stake but declined to put a value on it.
'We believe that the 25 per cent stake holds great potential. We have spoken to Air China but we do not have an agreement,' managing director Henry Fan Hung-ling said. 'We are looking to see if there may be other buyers but it all boils down to a question of price.'
Air China does not provide separate earnings for its cargo division which was hived off from the group in 2004. It is thought to be a loss-making enterprise this year despite robust growth in technology exports from the mainland.
The volume of cargo Air China Cargo handled in the third quarter expanded 16.4 per cent to 225,000 tonnes but average load factors - a key indication of profitability measuring the proportion of available space filled with cargo - were just 51.4 per cent.
Cathay Pacific by comparison, posted a global load factor of 68 per cent in the first nine months.
