China Eastern Air invites private investors to logistics business
Eastern Air Logisitcs introduces investors including Legend Holdings as major shareholders as it vies to compete with Fedex and UPS
China Eastern Air Holding Company has become the latest test case in Beijing’s ambitious plans to reform state-owned enterprises by bringing in private investors.
The airline operator said on Monday it will introduce four private investors, including Legend Holdings, owner of the Lenovo computer brand, to share ownership of its logistics arm, Eastern Air Logisitcs (EAL).
The purpose of the restructuring is to build EAL into a global first-class logistics provider neck-and-neck with Fedex, UPS and DHL
The restructuring is aimed at building a world-class logistics company capable of competing with the likes of Fedex, the company said.
The four private entities will become EAL’s major shareholders, with an aggregate investment worth around 2.3 billion yuan, the company said in a press release.
After the deal, China Eastern Air Holding Company will control 45 per cent of EAL, Legend Holdings will take 25 per cent, Greenland Financial, a subsidiary of property giant Greenland Holdings, will own 10 per cent, while two private logistics firms – Global Logistic Properties’ China branch and Deppon Logistics – will take a 5 per cent stake each.
Core staff of EAL will hold the remaining 5 per cent stake.
“The purpose of the restructuring is to build EAL into a global first-class logistics provider neck-and-neck with Fedex, UPS and DHL, while also exploring a suitable path for SOE reform,” the press release said.