Bailout

Politicising Covid-19 undermines Cathay Pacific's HK$39 billion bailout

Commercial assumptions are irrelevant if Hong Kong uses the health crisis to disguise social gathering policies and extend travel restrictions.

The Hong Kong government handed Cathay Pacific a HK$39 billion package to take a 6% position into the city-state’s flagship carrier. Swire Pacific, the 200-year-old conglomerate with businesses that include property along with food and beverage divisions, remains the majority shareholder at 42%.

Under the deal, Air China’s ownership drops to 28% while Qatar Airlines sees its ownership fall to 9%. 

The bailout, a combination of preferential shares, warrants, and a bridge loan, flips the script for the industry from a few months earlier. Given the Covid-19 global pandemic, the government’s response may not necessarily meet a moral hazard, but it is not forgotten among...

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