China Eastern to Set up Yunnan JV

(Beijing) - China Eastern Airlines Corp. said it will set up a joint venture with the state-owned assets regulator in Yunnan Province.

The airlines said in a statement on late July 26 that the venture will have a registered capital of 3.66 billion yuan, in which China Eastern will hold 65 percent stake and the Yunnan provincial State Assets Supervision and Administration Commission (SASAC) will have 35 percent stake.

The transaction is pending approval of China Eastern's shareholders.

According to the plan, China Eastern will invest a total of 2.38 billion yuan in two installments, including 700 million yuan in cash and 1.68 billion worth of aviation assets.

The Yunnan SASAC will invest 254 million yuan in cash and 1 billion yuan worth of land use rights in the new Kunming airport. The entire investment will be completed within two years.

A five-member board of directors will be set up for the new company, in which China Eastern will have three seats while the SASAC will have one.

China Eastern said that the joint venture will effectively use the company's investment in the Yunnan aviation market and strengthen the airlines' presence in the market.