Exclusive | Two observers to join Cathay Pacific’s board in weeks as Hong Kong government’s ‘eyes and ears’, finance minister reveals as part of bailout of ailing carrier

Cathay Pacific Airways will have two government-appointed observers on its board in the coming weeks who will be the administration’s “eyes and ears”, Hong Kong’s financial secretary said on Thursday as he revealed more details of an unprecedented multibillion-dollar bailout of the city’s flag carrier.

Chan announced on Tuesday that under the airline’s HK$39 billion (US$5 billion) recapitalisation plan, the government would provide a lifeline of HK$27.3 billion that would grow into a 6.08 per cent stake when all shares were fully exercised.

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Hong Kong government to bail out Cathay Pacific with HK$30 billion in loans and direct stake

Hong Kong government to bail out Cathay Pacific with HK$30 billion in loans and direct stake

He added that to ensure the carrier would safeguard public interest after the government’s direct investment, authorities had already started approaching potential candidates as observers, who should be seasoned professionals or business leaders in the private sector. The process will be completed within weeks.

“They will play an oversight role and will be the government’s eyes and ears, but they will not interfere with the firm,” Chan said, adding that the personnel would report to the administration regularly and enjoy rights such as being non-executive directors except for the ability to vote.

“Apart from having meetings or receiving papers, when they have any inquiries and want to learn more, they can directly approach management staff who have an obligation to answer them ... Their mandate is to protect government’s interests.”

Chan said it was not a must but desirable for the observers to have experience in the aviation business, adding they would need to command public confidence to hold the position.