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SINGAPORE: Singapore Airlines has said it will explore other means of developing its relationship with China Eastern Airlines.
It said this in a stock exchange filing late Sunday that confirmed that its agreement for a proposed strategic investment in China Eastern expired on August 9.
SIA was looking to buy a 24 per cent stake in China Eastern in a deal estimated to be worth around US$923 million. SIA had tied up with its parent, Temasek Holdings, for the proposed acquisition.
But the deal was vetoed earlier this year by China Eastern shareholders, who said the price was too low.
China Eastern had said at the time that it would continue to pursue an agreement with SIA. However, on Friday, China Eastern said it was not going to re-open talks with SIA after all.
Analysts that Channel NewsAsia spoke to had speculated that China Eastern could possibly be walking away because its share price had fallen some 70 per cent since January.
This would have a direct impact on the price that SIA would pay for its proposed stake.
Analysts have said that the scuttled deal could be a blessing in disguise for SIA because of China Eastern's perceived poor financial standing.
Last year, China Eastern lost around US$435 million, making it China's only unprofitable listed carrier. It was due to turn in a profit in the first half of this year after boosting efficiency in its operations.
SIA told Channel NewsAsia on Friday that it has not ruled out further talks with China Eastern once the Beijing Olympics draw to a close.
In Friday trade, China Eastern shares fell 7 per cent to close at HK$2.14, while SIA shares lost about 1 per cent to S$15.04.
- CNA/ir
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