Air China was suspended from trading in Hong Kong and Shanghai yesterday because of a possible 1 billion yuan (HK$1.23 billion) worth of asset injections from its parent, China National Aviation Holding Company.
The carrier said on Thursday night that China National Aviation was considering channelling 1 billion yuan in government funding granted last September, along with a 50 million yuan energy-saving subsidy from the government, to Air China.
The capital injection would be made through a private placement, with Air China issuing 1 billion yuan in shares to its parent in exchange for the funds, the airline said.
It said shares in Air China would resume trading within five working days after consultation to see whether the planned transaction was in violation of government policy.
Shares in Air China closed at HK$5.12 on Thursday before its suspension.
Air China's net profit last year dropped 41 per cent year on year to 70.6 billion yuan, because of surging fuel costs and weaker fuel-hedging gains in the year. The profit was also hit by a 1.69 billion yuan impairment loss on 39 aircraft that the company planned to sell last year.
The operating environment for carriers remains tough, with high fuel prices and weak demand.