Cathay Pacific will donate China National Aviation Corp shares worth about HK$180 million to charities and NGOs in a move to complete its Dragonair acquisition.
The giveaway of the shares in Dragonair's former parent company, worth about HK$2.75 each at yesterday's closing price, will be Hong Kong's biggest corporate donation. A formal announcement will be made next week.
More than 50 bodies including environmental groups, associations for the elderly, youth organisations and charities for the disabled will benefit. The recipients are mostly local, but also include mainland charities.
The news came a day after Dragonair axed 191 staff as a result of the takeover. The 174 local and 17 overseas employees made redundant were paid a total of HK$30 million in compensation.
According to the Hong Kong Takeover Code, Cathay Pacific is required to dispose of its CNAC shares to conclude the Dragonair acquisition.
Under the takeover plan, Air China will make a privatisation offer for CNAC once the acquisition is completed on Thursday. If Cathay Pacific accepts the privatisation offer as a CNAC shareholder, certain aspects of the acquisition would be treated as special deals, which the takeover code prohibits.
A Cathay spokesman said the donation demonstrated the company's commitment to being a responsible corporate citizen. 'We think it is a very good way to help to support a lot of worthy causes.'
