Cathay Pacific Airways has agreed to sell 20.7 million shares in HAECO, or Hong Kong Aircraft Engineering Company Limited, to Swire Pacific, the Hong Kong-based industry giant announced on Wednesday.

The transaction was still subject to shareholder approval.

The shares represented 12.45 percent of the issued share capital of HAECO and was valued at 1.9 billion HK dollars (244 million U.S. dollars). If approved, Cathay Pacific's direct interest in HAECO will decrease from 27.45 percent to 15 percent, while Swire Pacific's stake will rise from 33.52 percent to 45.96 percent.

Cathay Pacific Chairman Pratt, who is also chairman of Swire Pacific and HAECO, said the transaction will improve Cathay Pacific's cash position during the extremely difficult time while allowing it to retain a strategic interest.

Cathay Pacific Chief Executive Tony Tyler said, "Cash preservation has remained Cathay Pacific's top priority during this downturn and over the past year we have already taken many measures to help us achieve this goal."

"There are signs that the recent slump in business may now be leveling out, but there is unlikely to be a sharp rebound," Tyler said, adding that the latest industry forecasts said that airline losses will total 11 billion U.S. dollars this year.

Cathay Pacific also confirmed that it has signed an agreement with the aircraft leasing company BOC Aviation for the sale and leaseback of six of the 19 Boeing 777-300ER aircraft the airline has on order.

Tyler said that Cathay Pacific had no intention to cancel aircraft orders but was in negotiation with manufacturers to defer some of its deliveries.

(Xinhua News Agency September 17, 2009)