China Eastern aims to sell 30% of Happy Air

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SHANGHAI – China Eastern Airlines is in detailed talks to sell a roughly 30 percent stake in regional carrier Happy Airlines to Aviation Industry Corp of China (AVIC), which owns a majority of Happy Airlines, company sources said on Tuesday.

China Eastern currently holds a 40 percent stake in the airline, which is based in Xi’an, in western China.

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“China Eastern wants to cut its holdings in Happy Airlines to help ease its financial difficulties. That intention is well understood by AVIC,” a company source with direct knowledge of the matter told Reuters.

Another company source added: “China Eastern wants to sell around a 30 percent holding to AVIC and the two sides are working on the details.”

A China Eastern spokesman declined to comment.

In February 2008, China Eastern won regulatory approval to set up Happy Airlines, capitalised at 1 billion yuan ($146 million), with AVIC I, a state-owned aircraft maker. AVIC I later merged with peer AVIC II to form aviation conglomerate AVIC.