Macau chief executive's family firms sell stake in Air Macau
Two companies controlled by the family of Macau Chief Executive Edmund Ho Hau-wah have sold their combined 1.25 per cent stake in financially troubled Air Macau to a subsidiary of mainland flag carrier Air China, according to sources.
The private sale for an undisclosed sum to Air Macau majority shareholder CNAC (Macau), confirmed yesterday by sources at Air China and wholly owned subsidiary CNAC, came just weeks after shareholders of the loss-making and technically insolvent Macau airline voted to approve a government-backed 507.3 million pataca rescue package.
Air Macau's financial rescue plan includes an injection of 200 million patacas in taxpayer funds from the Macau government, which Mr Ho heads.
Disposal of his family's stake would appear to alleviate potential concerns over conflict of interest regarding the bailout plan and rescue the family from having to inject further capital into the struggling airline.
'Being a politician, especially in a small region like Macau, [Mr Ho] should be very careful about doing these kind of things, even though his family owns only a small share,' said Larry So Man-yum, an associate professor of public administration at Macau Polytechnic Institute.
Air Macau notified its shareholders of the transaction in a private letter on June 22, according to the Macau-based Portuguese-language newspaper, Ponto Final, which first reported details of the sale on July 10.
Following the sale of the Ho family stake, CNAC's voting interest in Air Macau rises to 52.25 per cent. Other substantial voting shareholders include Portuguese airline TAP, with 15 per cent, and Sociedade de Turismo e Diversoes de Macau, with 14 per cent.
Locally incorporated Portuguese-owned lender BNU, Taiwan's Evergreen Airways and the Macau government each hold a 5 per cent stake.
Mr Ho, whose term as Macau's top official expires in December, was a founding shareholder of Air Macau when it was established in 1994 through two local companies he controlled together with his wife: Tenways and Tengood.
On taking office in 1999, Mr Ho transferred control of the two firms to other family members. According to Ponto Final, Tenways is now controlled by Mr Ho's mother, Chan King, while control of Tengood was transferred on June 6 to Mr Ho's son, Justin Ho King-man.
The bailout plan passed by a two-thirds majority of shareholders on April 15 called for existing shareholders to inject 307.3 million patacas to recapitalise the airline.
That was to be partly matched by a 200 million pataca contribution from the Macau government.
Not all shareholders were happy with the bailout plan, as it called for them to contribute new capital to a money-losing business. TAP took legal action and won an injunction from a Macau court this month that has temporarily suspended the plan.
A spokesman for the Macau government referred inquiries to Air Macau. A spokesman for Air Macau declined to comment.
