The Gulf carrier completes its eight-year investment in the Hong Kong flag carrier at a significant premium, as Cathay buys back the shares in a move signaling confidence in its post-pandemic recovery.
HONG KONG: Qatar Airways has agreed to sell its entire 9.7% stake in Cathay Pacific Airways Ltd. for approximately $897 million, marking a complete exit from one of its key global airline investments.
In a deal announced late Wednesday, Cathay Pacific will repurchase the shares directly from the Doha-based carrier at HK$10.8374 per share. This price represents a 35% premium over what Qatar Airways originally paid for the stake in 2017, though it is at a 4% discount to Cathay’s last closing price.
A Strategic Divestment
The move is framed by Qatar Airways as a disciplined portfolio management decision. “This transaction aligns with Qatar Airways Group’s strategic investment approach and follows a period of strong financial performance,” said CEO Badr Mohammed Al-Meer. He added that the exit allows the company to “optimise its investments and position itself for long-term growth.”
For Cathay, the buyback is a sign of strength and a vote of confidence in its future. The airline has embarked on an ambitious HK$100 billion investment plan to renew its fleet and enhance services after suffering heavy losses during the pandemic.
Market Reaction and Ownership Shift
The market responded positively to the news, with Cathay’s shares rising 4.8% on Thursday. Analysts suggested the buyback reduces selling pressure on the stock and is a net positive.
“This should be good for Cathay’s stock price as there would be fewer shares floating in the market,” said Kenny Ng, a securities strategist at China Everbright Securities International.
Upon completion of the transaction, the shareholding of Cathay’s major stakeholders will increase. Swire Pacific’s stake will rise to 47.69% from 43.12%, and Air China’s shareholding will grow to 31.78% from 28.74%.
Despite the divestment, both airlines confirmed they would maintain their partnership through the oneworld global alliance.
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