HONG KONG/CHICAGO/BENGALURU, Qatar Airways has agreed to sell its entire 9.7% stake in Cathay Pacific Airways Ltd for about US$897 million (HK$6.97 billion or RM3.75 billion), ending its eight-year investment in Hong Kong’s flagship carrier.
Cathay Pacific announced on Wednesday that Qatar Airways had proposed the sale, and the airline would repurchase the shares at HK$10.8374 per share — around a 4% discount to the stock’s last closing price. The buyback will be financed through Cathay’s internal funds and existing credit facilities.
Qatar Airways, which acquired the stake in November 2017, will earn a roughly 35% premium over its initial investment. The deal will reduce Cathay’s public float, potentially easing market selling pressure. “It’s likely more about Qatar Airways’ cash flow management,” said Kenny Ng Lai-yin, a strategist at China Everbright Securities International, adding that the move could support Cathay’s share price.
Following the announcement, Cathay’s shares rose 4.8% on Thursday, while Air China gained 4% and Swire Pacific advanced over 1%.
Cathay, one of Asia’s largest cargo carriers based at the world’s busiest air freight hub, has benefited from strong e-commerce demand out of China. The buyback will increase Swire Pacific’s stake in Cathay from 43.12% to 47.69% and Air China’s from 28.74% to 31.78%, pending approval.
Qatar Airways CEO Badr Mohammed Al-Meer said the divestment was part of the airline’s “disciplined portfolio strategy,” enabling it to optimise investments and position for long-term growth after a period of strong financial performance.
Cathay chairman Patrick Healy said the company’s decision to buy back the stake reflected its confidence in future growth, citing a HK$100 billion investment plan over seven years covering new aircraft, cabin upgrades and lounge enhancements.
Despite significant losses during the pandemic, Cathay’s recovery is gathering pace, with passenger numbers for Cathay and its low-cost unit HK Express up 20% year-on-year in September.
Qatar Airways’ exit does not signal an end to collaboration between the two carriers — both reaffirmed their partnership under the oneworld Alliance.
