- POSTED: 25 Apr 2014 16:40
- UPDATED: 25 Apr 2014 16:41
Chinese budget carrier Spring Airlines said it plans to raise 2.5 billion yuan (US$400 million) in an initial public offering (IPO) in Shanghai to fund fleet expansion in the country's rapidly expanding aviation sector.
SHANGHAI: Chinese budget carrier Spring Airlines said it plans to raise 2.5 billion yuan (US$400 million) in an initial public offering (IPO) in Shanghai to fund fleet expansion in the country's rapidly expanding aviation sector.
The company plans to sell up to 100 million new shares for listing on the main board of the Shanghai Stock Exchange, according to a draft prospectus released late Thursday.
Proceeds will be used to help purchase up to nine Airbus A320 aircraft and three A320 flight simulators, as well as to replenish working capital, it said in a document filed with the China Securities Regulatory Commission (CSRC).
It already had 39 A320 jets in service and operated 64 inbound and outbound routes at the end of 2013, according to the document.
Spring Airlines first announced plans for an IPO in 2009, seeking to raise more than 1.0 billion yuan, but delayed several times due to sluggish conditions and weakness in the domestic aviation sector, state media has reported.
China's commercial airline industry is dominated by the "Big Three" -- flag carrier Air China, China Eastern Airlines and China Southern Airlines -- but a move towards greater competition has seen the growth of smaller players.
The aviation industry in Asia, especially China, is booming with growing middle class keen to take to the air.
This week Shandong Airlines, one of China's smaller carriers, said it has agreed to buy 50 passenger planes from US manufacturer Boeing as it looks to tap that demand.
Spring's share offer plan must still pass several rounds of review by the CSRC before approval.
Based in the commercial hub of Shanghai, Spring Airlines was set up in 2004 with registered capital of 300 million yuan. The firm recorded a net profit of 732.2 million yuan last year, up 17.2 per cent from 2012, the prospectus showed.