By Gina Lee
Investing.com – Hong Kong’s Cathay Pacific Airways (HK:) will receive a HK$30 billion ($3.87 billion) rescue package from the Hong Kong government as part of a $40 billion capital restructuring exercise.
The package will see the government take an undisclosed stake in the embattled airline, which includes two “observer” boardroom seats. These seats, although they do not come with voting rights, will allow the government to have its say on major decisions affecting public interest.
The airline will also receive a loan for an unspecified amount to be paid back later.
Airlines have been hit hard by the COVID-19 virus, with the resultant travel restrictions shrinking traveler numbers. Most have been forced to seek government bailouts or strengthen their cash position.
Shares of Cathay shareholders Swire Pacific (OTC:) and Air China (OTC:) were also halted from 9AM in Hong Kong. Swire has a 45% stake in the airline, while Air China has an almost-30% share.
Cathay’s shares closed at HK$8.81 ($1.137) on Monday.
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