HK Airlines to delay IPO over market conditions

Hong Kong Airlines has decided to delay its initial public offering (IPO), originally scheduled for early this year, until the third quarter this year because of volatility in the stock market, a company official said Monday.

The IPO, which the company had said was expected to raise about HK$5 billion ($643.88 million), has been postponed as advised by Goldman Sachs Group Inc, deputy general manager and company spokesperson Eva Chan told Reuters.

"Goldman recommended postponing the IPO a bit as they find the market volatile," Chan said.

The Hong Kong-based carrier is controlled by Hong Kong Airlines Holding, and its top shareholders include Hainan Airlines and Hainan Airlines' parent HNA Group.

The airline's decision to delay the offering comes on the back of growing volatility in global equity markets that has sapped investor demand for new listings and caused a 51 percent plunge in Asia-Pacific IPO issuance in 2011 from 2010.

The market could weaken further this year because of ongoing concern over recovery in Europe and other major economies, with consulting firm PricewaterhouseCoopers forecasting a 26 percent drop in IPOs in Hong Kong in 2012.Such a development would dent the city's status as one of the world's main capital-raising hubs.

Hong Kong Airlines, which currently has a fleet of 14 aircraft including six A330-200s and eight Boeing 737-800s, is taking delivery of eight to 10 aircraft this year, including two A330-200s this month, Chan said.

Reuters