The Gulf carrier capitalizes on its eight-year investment as Cathay repurchases the 9.7% stake at a 35% premium, bolstering its core shareholder structure.
HONG KONG: In a major financial move, Qatar Airways has agreed to sell its entire 9.7% holding in Cathay Pacific Airways for HK$6.97 billion ($897 million), concluding a strategic investment held since 2017.
Cathay Pacific will finance the share buyback from its own resources, paying HK$10.8374 per share—a price that secures a significant 35% return for the Doha-based carrier on its original investment.
A Premium Exit and a Strategic Buyback
The transaction underscores a profitable exit for Qatar Airways and a strategic consolidation for Cathay. The buyback will reduce the number of Cathay shares in the market, a move that analysts say typically supports the stock price.
“This deal should be positive for Cathay’s shares as it reduces the free float and potential selling pressure,” said Kenny Ng, a securities strategist at China Everbright Securities International.
For Qatar Airways, the sale aligns with a review of its global investment portfolio. “This transaction is consistent with Qatar Airways Group’s strategic approach to managing its investments,” said CEO Badr Mohammed Al-Meer, indicating the proceeds would be redirected toward long-term growth initiatives.
Strengthened Ownership and Continued Partnership
The buyback will significantly concentrate ownership among Cathay’s top shareholders. Swire Pacific’s stake is set to increase to 47.69%, reaffirming its controlling interest, while Air China will see its holding rise to 31.78%.
Despite the ownership change, the operational relationship between the two airlines will continue. Both companies confirmed they would maintain their alliance within the oneworld network, ensuring no disruption for passengers.
The deal highlights Cathay’s recovering financial health as it implements a multi-billion-dollar revitalization plan following the challenges of the pandemic.
