Qatar Airways has announced plans to sell its entire 9.7% stake in Cathay Pacific Airways for around $897 million (HK$6.97 billion), marking a full withdrawal from the Hong Kong carrier after eight years of investment.
Cathay confirmed on Wednesday that the Doha-based airline had approached it regarding the sale, with the Hong Kong flag carrier agreeing to repurchase the shares through a buyback at HK$10.8374 per share, around 4% below the previous closing price.
Qatar Airways first acquired its stake in November 2017, becoming Cathay’s third-largest shareholder after Swire Pacific and Air China. The latest transaction will see Cathay pay a roughly 35% premium on the price Qatar Airways originally paid for the shares. The airline said the deal would be financed through its internal funds and existing credit facilities.
“I don’t think there’s anything special to read into it (buying back from Qatar). I think it’s more likely about Qatar Airways having their own cash needs,” said Kenny Ng Lai-yin, securities strategist at China Everbright Securities International. Ng added that the deal should benefit Cathay’s share price by reducing the number of shares on the market and easing selling pressure.
Shares of Cathay rose 4.8% in Hong Kong trading on Thursday following the announcement. Air China shares were also up 4%, while Swire Pacific gained more than 1%.
Cathay, based at the world’s busiest cargo hub, remains one of Asia’s largest air freight carriers and continues to benefit from the surge in e-commerce shipments from China.
Qatar Airways’ investment in Cathay marked its first major foray into the Asian market, aimed at strengthening its global reach and driving traffic through its Doha hub. Despite holding a significant minority stake, Qatar Airways never had board representation at Cathay, which is managed by Swire Pacific.
Before the investment, Cathay operated flights between Hong Kong and Doha under a codeshare arrangement from 2014 to 2016, before discontinuing the route “for commercial reasons.”
Qatar Airways Chief Executive Badr Mohammed Al-Meer said the divestment aligned with the carrier’s long-term financial strategy.
The Gulf airline has a track record of strategic global investments, with stakes in British Airways parent company IAG, South American group LATAM, and Virgin Australia among others.
Cathay Chairman Patrick Healy said the share buyback reflected “strong” confidence in the company’s recovery and long-term prospects. The airline recently announced a HK$100 billion investment plan over seven years, focusing on renewing its fleet, upgrading cabin products, and enhancing lounges.
After sustaining heavy losses during the COVID-19 pandemic, when Hong Kong maintained some of the world’s strictest travel restrictions, Cathay’s operations have been steadily improving. The airline and its budget subsidiary HK Express carried 20% more passengers in September compared to a year earlier.
If approved, the buyback will see Swire Pacific’s shareholding rise from 43.12% to 47.69%, while Air China’s stake will increase from 28.74% to 31.78%.
Despite the sale, both airlines confirmed they would maintain their cooperation through the oneworld Alliance.
