News
China’s Caissa Travel abandons Beijing Capital Airlines bid but proceeds with travel agency investment
May 13th 2016
HNA Group’s Caissa Travel Group Co. this week said it had abandoned plans to acquire the parent’s 70% shareholding in Beijing Capital Airlines (BCA) after it failed to secure the requisite regulatory approvals in time. Read More » However, citing people familiar with the deal, the South China Morning Post said the acquisition had “likely fallen apart because Beijing Tourism Group – BCA’s state-owned shareholder – had reservations about becoming part of a listed company amid lacklustre investor appetite at the moment”.
BCA operates regular passenger flights aimed at the leisure market. It serves destinations throughout the Mainland as well as South Korea, Japan, the Maldives, Vietnam, Denmark, Spain, Japan and Thailand. The acquisition would have provided better synergies between Caissa Travel and BCA.
On Wednesday, Caissa said it would proceed with plans to raise eight billion yuan ($1.2 billion) through a private share placement to launch a Chinese outbound travel marketing platform. It intends to open more than 1,000 shops and malls and to boost cruise sales by establishing online and offline cruise experience centres in China and abroad, in partnership with international cruise operators.
Caissa investors objected the move, saying the value of their investment has been reduced after the failed BCA acquisition, while issuing new shares would further dilute the value of their holdings.
Overall, HNA Group’s appetite for growth appears undiminished. A report in The Wall Street Journal last week suggested the Haikou-headquartered conglomerate plans to take a controlling stake in Singapore logistics firm, CWT Ltd, for approximately $1 billion, with negotiations now “ongoing for several months”. At the end of 2015, HNA Group said it had assets of 600 billion yuan ($92.3 billion), including 1,100 aircraft serving nearly 700 domestic and international routes.
In separate events, Aviation Industry Corporation of China (AVIC) – the Chinese state-owned aerospace and defence firm – on May 5 completed the acquisition of cabin interiors company, AIM Altitude, from investment house, TowerBrook Capital Partners. “AIM Altitude’s expertise in cabin interiors will further extend our core capabilities and international competitiveness,” said AVIC International VP, Xu Tongyu. Mark Edwards, CEO AIM Altitude added the company’s “operations would remain unchanged and it will continue operating under its existing name”.
