China Southern Airlines May Face Trading Curbs
Shenzhen Daily | Jan. 05, 2007
On January 4, China Southern Airlines Co. Ltd. said that government ownership rules and insufficient cash would force it to delay its conversion of State-owned shares.
As a result, it may face trading curbs announced by the Shanghai and Shenzhen stock exchanges. The exchanges said on January 4 that companies failing to follow through with State reforms by January 8 would be subject to 5 percent daily share price movements in either direction rather than 10 percent allowed for other shares.
"Our board of directors reminds investors of risks in trading our shares" because of the firm's failure to start the reform, China Southern Airlines said.
"But our parent vows it will still try to win support from related parties and hopes to kick off the reform later," it said.
China Southern Airlines said its parent controls 50.3 percent of the listed company in the form of State shares but noted that government restrictions requiring state control of key companies made it unable to reduce the State-owned share.
The listed company also said its parent lacked sufficient cash and other resources to compensate public shareholders for any dilution to existing shares that would occur if State-owned shares became tradeable.
China Southern Airlines also announced that it has launched a new service from Beijing to Lagos, its first to Africa.
Outbound flights will leave Beijing every Monday, Wednesday and Saturday, and return from the Nigerian capital every Tuesday, Thursday and Sunday, the airline said in a statement.