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Cathay Pacific considers to purchase up to 32 Airbus A321-200neo aircraft

Cathay Pacific Airways is considering the acquisition of up to 32 Airbus A321-200neo or A320-200neo aircraft by 30 September 2023, which, if pursued, would be a major transaction for the company.

The carrier has posted its best H1 profit since 2010, aiming to expand its fleet and repay a government aid package.

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HONG KONG: Cathay Pacific Airways is considering to purchase up to 32 Airbus A321-200neo aircraft or A320-200neo aircraft on or before 30 September 2023.

“If the transaction were to proceed, it would be expected to constitute a major transaction for the company under the listing rules.”

“Shareholders of the company should be aware that there is no assurance that the transaction (purchase of aircrafts) will take place or as to when it may take place.”

“Shareholders and potential investors are advised to exercise caution in dealing in shares of the company,” the Hong Kong flagship carrier said in a filing with Singapore Stock Exchange on Wednesday (9 Aug).

Cathay Pacific posts best H1 profit since 2010, to repay government aid package

Cathay Pacific reported its best first-half profit today, in more than a decade and announced plans to order more planes and repay a Hong Kong government rescue package after a major turnaround in travel demand.

The interim net profit of HK$4.3 billion ($550 million), in line with its guidance for earnings of up to HK$4.5 billion, compared with a HK$5 billion loss a year earlier, when Hong Kong’s strict quarantine rules were in place.

“While we are still only part way along our rebuilding journey, our results for the first six months of 2023 demonstrate that we are on the right track,” Cathay chairman Patrick Healy said in a statement.

Cathay has recovered capacity more slowly than its closest rival, Singapore Airlines, because it faced tighter quarantine rules for longer, and needed to train more staff and bring back grounded planes.

The Hong Kong carrier expects to reach 70% of its pre-pandemic capacity by the end of the year and 100% by the end of 2024. That compares to nearly 60% now and 3% a year ago. According to Reuters.

“That’s a very rapid rise,” Healy told a news conference. “We started later, but the trajectory of that recovery, when compared with the trajectory of the recovery from the starting points of our key regional competitors, is absolutely on track.”

Cathay said it intended to exercise purchase rights to buy 32 Airbus A320neo family aircraft, looking to add to its fleet as demand rebounds. It expected the aircraft to be delivered by 2029, bringing total new deliveries to more than 70.

It will also bring an “all-new business class experience” in the second quarter of 2024 as part of the redesign of its long-haul Boeing 777-300ER cabins, and a new first-class cabin onto the 777-9 aircraft in 2025.

It will also buy back 50% of the HK$19.5 billion of preference shares held by the Hong Kong government by the end of 2023, and the remainder by the end of July 2024, subject to completion of a proposed capital reduction and business conditions at the time.

Cathay issued the shares in 2020 as part of a HK$39 billion rescue package from the government and its biggest shareholders, Swire Pacific and Air China, that shored up its finances after travel demand collapsed during the pandemic.

“The results are not bad, but they may lack special business highlights in the second half,” said Eugene Law, business development director of brokerage China Galaxy International, adding that some investors may choose to take profit after the earnings after the previous rally.

CEO Ronald Lam said the main challenges faced by the industry globally, namely manpower shortages and supply chain issues, are expected to improve and normalise into 2024.

“I must say, compared to the challenges we faced in the last three years during the pandemic, all these are … happy problems, right?” Lam said.

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Taiwan’s FSC rejects CTBC Financial’s bid to acquire Shin Kong Financial, favoring Taishin’s merger plans

Taiwan’s Financial Supervisory Commission rejected CTBC Financial’s tender offer to acquire Shin Kong Financial, raising concerns about its plan, while Taishin Financial moves closer to a merger with Shin Kong. Both companies have scheduled shareholder meetings for 9 October.

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3 days ago

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17 September 2024

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On 16 September 2024, Taiwan’s Financial Supervisory Commission (FSC) rejected an application from CTBC Financial Holding Co. to launch a tender offer for Shin Kong Financial Holding Co., potentially clearing the path for Taishin Financial Holding Co. to proceed with its proposed merger with Shin Kong Financial.

Jean Chiu, vice chairperson of the FSC, stated at a press conference that CTBC Financial failed to provide a comprehensive implementation plan for the acquisition. CTBC had proposed acquiring between 10% and 51% of Shin Kong Financial’s shares initially, with plans to later fully integrate the company.

However, the FSC raised concerns over CTBC’s lack of detailed provisions on how it would manage various potential outcomes, particularly if it failed to secure full control of Shin Kong.

Additionally, the FSC highlighted gaps in CTBC’s understanding of the financial health of Shin Kong’s life insurance subsidiary, as well as a lack of firm commitments regarding raising the capital size of this subsidiary.

This uncertainty, combined with the method of payment proposed by CTBC—using a mix of cash and its own stock—raised concerns that the tender offer could negatively affect shareholders due to potential fluctuations in CTBC’s stock price during the transaction process.

CTBC’s proposal, announced on 20 August, included an offer of NT$4.09 (US$0.13) per share in cash and an exchange of 0.3132 CTBC shares for each Shin Kong share, amounting to NT$14.55 (US$0.46) per share. This bid was labeled by Taishin Financial as a hostile takeover attempt, as Shin Kong Financial’s board had not approved the offer.

In response, Taishin Financial, which has been vying for Shin Kong through a merger, revised its stock swap offer on 11 September.

The new offer included 0.672 Taishin shares plus 0.175 preferred shares for each Shin Kong share, translating to NT$14.18 per share—closer to CTBC’s offer. Taishin had earlier disclosed on 22 August its original plan to offer 0.6022 shares of its stock per Shin Kong share, which amounted to NT$11.32 (US$0.36).

Chiu emphasized that tender offers based on stock payments are rare in Taiwan, with only six cases since the 2002 revision of tender offer regulations.

She referenced Fubon Financial Holding’s acquisition of Jih Sun Financial in 2023, where cash was used instead of shares, to highlight how tender offers have traditionally been handled in the local market.

Chiu concluded by stating that although Taiwan’s financial market operates on free-market principles, takeovers should avoid disrupting market order and respect corporate stability.

Taishin Financial and Shin Kong Financial are set to hold a special general meeting on 9 October to secure shareholder approval for their merger plan, which will then require the FSC’s endorsement.

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Business

Times Bookstores to close after nearly four decades in Singapore

Times Bookstores will cease operations in Singapore after nearly four decades, with its final outlet at Cold Storage Jelita closing on 22 September 2024. The closure is seen as being attributed to high rents, low sales, and rising operational costs, reflecting challenges faced by physical bookstores in Singapore.

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3 days ago

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16 September 2024

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Times Bookstores will end its operations in Singapore after nearly 40 years, as its last remaining outlet at Cold Storage Jelita on Holland Road is set to close on 22 September 2024.

In a farewell statement posted on Instagram on 16 September, the English book retailer, established in 1978, invited customers to visit the store one final time. “Our happily ever after has finally come,” the post read. “It is with both a heavy heart and a sense of fulfilment that we announce the closure of Times Bookstores.”

The closure of Times Bookstores has been anticipated for several years. The company, owned by regional consumer group Fraser and Neave Limited, closed its branches in Plaza Singapura and Waterway Point in February 2024.

The shutdowns triggered a discussion in Singapore’s literary community about how to better support bookstores.

Struggles Facing Book Retailers

Times Bookstores has been affected by increasing rent, low sales, and rising operational costs. The Covid-19 pandemic exacerbated its challenges, with the business quietly closing outlets at Marina Square and Paragon in 2021.

A key warning came in 2019 when the retailer closed its 8,000 sq ft Centrepoint branch, once one of Singapore’s largest bookstores.

These closures reflect a broader struggle for physical bookstores in Singapore. Rising rent, higher goods and services taxes (GST), and increasing printing costs have driven book prices up, making it difficult for traditional retailers to compete.

Popular bookstore also shut its Marine Parade outlet on 18 June 2023, citing similar reasons, while Books Kinokuniya closed its JEM branch on 9 May 2022 due to slow sales and rental costs.

Future of Singapore’s Bookstores

Following the closure of Times, few large bookstore chains remain in Singapore. Books Kinokuniya, the largest bookstore in Singapore, continues to operate its flagship store at Takashimaya Shopping Centre.

According to a spokesperson from Toshin Development Singapore, cited by the Straits Times, Kinokuniya remains a key tenant, though no specific renewal dates were disclosed. The spokesperson added that Kinokuniya continues to engage with the landlord regularly to appeal to patrons and remain in trend.

Although Times Bookstores will no longer have physical stores in Singapore, its book distribution business, which supplies books from international and local publishers to other retailers, continues to operate.

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