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HONG KONG : China Eastern Airlines is seeking approval from the Chinese government for the sale of a stake to Singapore Airlines (SIA), an official with the troubled Shanghai-based carrier said Friday.
Upon approval, China Eastern will disclose the details of the agreement, which it said on Tuesday has been reached, allowing SIA to buy a stake in the mainland carrier.
"We are still communicating with the Chinese government with regards to our agreement with Singapore Airlines," said an unnamed official with the investor relations group of China Eastern.
"We cannot disclose details until we get the approvals," he said, adding an announcement could come as early as next week.
China Eastern spokesman Luo Zhuping would not confirm whether the company was seeking official approval: "We are communicating with various parties."
He added the company has not yet decided when an announcement will be made.
China Eastern said on Tuesday the negotiations have been concluded, but declined to give further details. On the same day, SIA said it was in an "advanced stage of discussions on a potential strategic investment".
Beijing-based Caijing magazine this week said the mainland carrier would sell a 25-percent stake for around one billion US dollars, which would make SIA the second-largest shareholder in the Chinese company.
Citing unnamed sources, Hong Kong-based South China Morning Post reported Friday that SIA would pay no more than six billion Hong Kong dollars (US$770 million) for less than a 20 percent shareholding.
The report also said investment company Temasek Holdings, which owns 56 percent of SIA, will join SIA in the deal that will see both companies holding a stake of up to 25 percent.
The deal, if confirmed, highlights foreign interest in tie-ups with Chinese airliners to tap the country's fast growing market and it could give ailing China Eastern a glimmer of hope, analysts said.
China Eastern Airlines recorded a net loss of 46 percent in the first quarter of the year of 510.9 million yuan (US$66.3 million), after losing 3.3 billion yuan in 2006. - AFP/ch
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