On December 21, Beijing Capital International Airport Co said it has won shareholder approval to raise up to four billion yuan (US$488 million) selling shares in Shanghai to fund terminal construction to meet growing passenger demand.

The Beijing-based airport operator plans to issue up to 800 million yuan-denominated shares, which will account for 17 percent of the company's enlarged share capital, it said in a statement.

China's sustained economic growth and increased personal incomes have been spurring domestic need for passenger and cargo air traffic.

Capital Airport raised HK$1.02 billion (US$130.8 million) selling additional shares in Hong Kong in September to finance renovation and expansion of airport facilities. Its shares have jumped 54.1 percent this year to close yesterday at HK$5.47.

Capital Airport said it will price its Shanghai shares at no less than 90 percent of the average price of its Hong Kong-traded stock during a pricing consultation period with institutional investors.

The international airport in Beijing, which opened a second terminal in 1999, handled more than 41 billion passengers in 2005, outpacing its designed capacity of 35 million a year.

The airport plans to build a third terminal and a new runway before the 2008 Olympics in the city, with an aim to raise capacity to 78 million passengers a year.

Capital Airport in October announced a plan to buy assets in the third phase of the airport, which is valued at 15.6 billion yuan, from its parent.

As part of its fundraising scheme, Capital Airport has also proposed to borrow up to 50 million euros (US$660 million) from the European Investment Bank and issue 10 billion yuan in debt to fund the expansion, according to an October 27 statement.

"Selling shares publicly can help the listed firm raise funds to buy its parent's assets," said Wu Zhiguo, a Guohai Securities Co analyst. "It will bolster the company's bottom line in the longer term as the Olympic games will certainly bolster traffic."

China's economic planners have said the country plans to spend 140 billion yuan by 2010 to construct airports to accommodate the growing air fleets.

Shanghai Airport Group Co said last month it is considering a plan to list the group as a whole via a share swap with its publicly traded unit.

Capital Airport was the last Hong Kong-listed company to unveil mainland listing plans as regulators are encouraging industry giants to sell shares at home to bolster domestic capital markets.