Han Ximin

ximhan@126.com

CHINA Southern Airlines will carry out an equity diversification plan that will involve an injection of 30 billion yuan (US$4.36 billion) of capital from three investors, the company announced Saturday.

The Guangdong Hengjian Investment Holding Corp., the Guangzhou Urban Construction Investment Group and the Shenzhen Penghang Equity Investment Fund will each inject 10 billion yuan into the airline, as part of the country’s efforts to diversify ownership structures among State-owned firms.

The company is the first enterprise under the administration of the Central Government to cooperate with local companies in equity diversification reform.

The move will significantly improve the company’s debt-to-asset ratio, generate funds for its growth and help modernize its decision-making mechanisms, the announcement said.

It will also use the funds to serve its main air transportation business, pay for construction related to the Belt and Road Initiative and support aviation development in cities in Guangdong.

China Southern is one of 96 enterprises owned and administered directly by the Central Government. Its profits slumped nearly 50 percent last year as a result of rising fuel costs and a weak yuan.