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Budget carrier Spring considering share float

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Spring Airlines, a Shanghai-based budget operator, is considering a listing on the mainland next year to partially fund a US$1.2 billion bill for the acquisition of 30 aircraft.

Spring Air was formed by Wang Zhenghua and started operations in 2005. It posted a more than 30 million yuan (HK$32.89 million) profit the following year with three Airbus 320s and saw earnings increase further to more than 70 million yuan with eight A320s in operation last year.

Following the airline's strong earnings performance, institutional investors such as Citigroup and Goldman Sachs tried to tie up with the budget carrier through minority stakes and by offering to sponsor an offshore listing. However, Spring Air dropped those plans after fierce debates among its directors.

'Finally, we decided to list on the domestic market,' Mr Wang, Spring Air's chairman, said in Shanghai. '[China] is where we have influence and a reputation.'

Mr Wang formed Spring International, a nationwide travel agency, in 1981. Spring International was ranked No1 in terms of domestic travel by the China National Tourism Administration.

One major disagreement between Spring Air and investment bankers is the carrier's valuation. Investment bankers suggested the capitalisation of Spring Air could reach at least eight billion yuan, given its net assets amounted to about one billion yuan, by next year.

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