SHENZHEN Airlines has put Huirun Investment Co. s 24-percent stake up for bidding as part of Huirun s court-ordered liquidation.
According to the Shenzhen Guangpeng Accounting Firm, Huirun had total debt of 4.01 billion yuan (US$608.2 million), while its total capital was 1 billion yuan, prompting a court to rule that its 24 percent stake in the Shenzhen-based carrier must be sold to pay off its debts. Huirun owner Li Zeyuan was arrested for unspecified economic crimes in November 2009.
Huirun used to be the controlling stakeholder with a 65 percent stake while Air China (CA) held 25 percent and Quancheng Logistics Co. 10 percent, before Li was arrested.
But CA took control of the country s fifth largest carrier with a 682.1-million yuan investment that increased its stake to 51 percent. Quancheng added its investment of 350 million yuan to boost its stake to 25 percent in March 2010, which diluted Huirun s stake in the carrier to 24 percent.
CA refused to comment on whether it would make a bid. Huirun s 24 percent stake in Shenzhen Airlines should be decided by a [Shenzhen] local court and bankruptcy supervisory committee. We don t want to make any comment on this issue, CA Board Secretary Huang Bin said.
Industry analysts said other domestic carriers were unlikely to bid because Shenzhen Airlines was a subsidiary of CA, but noted the Shenzhen government could be a candidate to increase its control of the carrier.
(SD-Agencies)
