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FILE PHOTO: The logo of the company China Southern Airlines is posted at a press conference in Hong Kong, China on March 27, 2018. REUTERS / Bobby Yip
SHANGHAI (Reuters) – China Southern Airlines (600029.SS) will carry out a stock diversification plan that will involve the injection of 30 billion yuan ($ 4.36 billion) of capital from three investors, announced the firm Saturday.
The Guangdong Hengjian Investment Holding Corporation, the Guangzhou Urban Construction Investment Group and the Shenzhen Penghang Equity Investment Fund will each inject 10 billion yuan into the airline, as part of the country's efforts to diversify ownership structures among state-owned enterprises. .
This will significantly improve the company's debt ratio, generate funds for growth and help modernize its decision-making mechanisms, the announcement said.
It will also use these funds to fund its core air transport activities, finance construction work related to China's Belt and Road Initiative, and support the development of aviation in cities in the southern province of Guangdong.
China Southern is one of 96 enterprises owned and administered directly by the central government. Its profits fell by nearly 50% last year due to rising gas costs and a weak currency.
Reportage of David Stanway; Edited by Himani Sarkar
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