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SINGAPORE-CHINA
Investment
September 2, 2007
Singapore Airlines buys stake in China Eastern
China Eastern Airlines Corp., the nation's third-largest carrier, surged to a record after agreeing to sell a stake to Singapore Airlines Ltd. and Temasek Holdings Pte.

China Eastern rose 76 percent to HK$6.55 as of 10:00 a.m. in Hong Kong. There's no daily limit for the stock which has been suspended for more than three months.

China Eastern will raise HK$11.3 billion ($1.5 billion) selling shares to Singapore Airlines, Temasek and its parent company, the Shanghai-based carrier said yesterday. The strategic investors will help the airline return to profit in 2007 after reporting losses for two consecutive years, according to China Eastern president Cao Jianxiong.

Singapore Airlines and its parent Temasek agreed to acquire Hong Kong-listed shares of China Eastern at HK$3.80 apiece, representing a premium of 1.9 percent to the closing price on May 21.

The two overseas investors will pay about $918 million for the combined 24 percent stake. China Eastern's parent company, China Eastern Air Holding Co., will buy 1.1 billion new shares, giving it a 51 percent stake. Bloomberg Reports

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