HK Airlines’ turmoil could impact Cathay Pacific takeover of HK Express
Cathay Pacific Airways says it is unfazed over a power struggle at Hong Kong Airlines that could ultimately impact Cathay’s proposed takeover of its sister airline Hong Kong Express.
In March, Cathay agreed a deal to buy low-cost carrier Hong Kong Express and CEO Rupert Hogg says the carrier is ‘perfectly comfortable with the progress’ of the deal that it expects to close by the end of 2019.
HK Express is led by executive chairman Zhong Guosong who indirectly holds a near49% stake.
He opposed the sale by parent HNA Group to Cathay Pacific and tried to block the transaction.
However, Zhong’s spat with HNA has extended to sister airline Hong Kong Airlines where he is embroiled in a power struggle for control.
Zhong filed an injunction amid claim and counter claim over irregularities and an alleged unauthorised share transfer.
The High Court is due to resume a hearing next month to rule on who is legally in control of the carrier.
Should Zhong win the court case, there are fears it could derail or at least delay Cathay’s acquisition of Hong Kong Express.
"Depending on the outcome of the court decision, that could have ramifications on the completion of the HK Express deal with Cathay," David Yu, finance professor at New York University Shanghai told the South China Morning Post.
Zhong led a boardroom coup at HK Airlines last month in a bid to oust some of its existing HNA affiliated directors.
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Editor for TravelMole North America and Asia pacific regions. Ray is a highly experienced (15+ years) skilled journalist and editor predominantly in travel, hospitality and lifestyle working with a huge number of major market-leading brands. He has also cover in-depth news, interviews and features in general business, finance, tech and geopolitical issues for a select few major news outlets and publishers.
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