Shareholders revolt as Hong Kong Airlines seeks more funds to keep flying
Shareholders are urging Hong Kong Airlines to disclose its 2018 accounts before it will sanction extra funding to keep its air operator’s license.
They are demanding more transparency before allowing a HK$2 billion ($255 million) share placement needed for the license after a stormy extraordinary shareholder meeting, Reuters reports.
Questions have been swirling around its ability to keep operating effectively for several months now, after a travel insurer ended insurance cover against the airline’s insolvency.
This prompted Hong Kong’s Air Transport Licensing Authority to demand detailed plans on the HNA Group backed airline’s strategy to improve its finances.
Shareholders have also called into question its dealing with other HNA backed airlines over the price it has paid for leasing aircraft.
Hong Kong Airlines executives told shareholders a fresh infusion of funds is needed or its ability to fly was in jeopardy.
They then discussed raising up to HK$2 billion via share placements, Reuters said.
HK Airlines has been served lawsuits in recent months alleging payment default for lessor and other supplier fees and has seen the departure of several top executives.
The airline reportedly booked a loss of about HK$3 billion last year.
In its 2017 accounts, monies owed to the airline from other HNA Group affiliates more than doubled to HK$1.3 billion.
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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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