CATHAY TO BUY BACK REMAINING SHARES

The Government said that it is pleased to note the decision by Cathay Pacific Airways to buy back all of its remaining preference shares.
 
The Government made the statement in response to Cathay Group's announcement today that it plans to buy back the remaining 50% of its preference shares from the Government on July 31 this year at a cost of $9.75 billion.
 
In June 2020, the Government invested $27.3 billion in the group through the Land Fund, comprising preference shares with detachable warrant of $19.5 billion and a bridging loan of $7.8 billion, with a view to safeguarding Hong Kong's position as an international aviation hub in the face of the unexpected impact of the COVID-19 pandemic.
 
Pursuant to the investment agreement, in July 2020, the Government designated fellow certified public accountant Carlson Tong and senior counsel Rimsky Yuen as the observers of Cathay Group's Board of Directors, until the group repays the Government in full the drawn bridge loan and interest and redeems all preference shares from the Government.
 
The Government thanked the two observers for their valuable contributions over the past few years.
 
It pointed out that major air service providers based in Hong Kong are an important component of the city's status as an international aviation hub.
 
Furthermore, it explained that its investment in the airline played an important role at a critical time, and the airline's operational and financial situation have improved with the full resumption of normal travel between Hong Kong and other places.
 
The Government added that it expects the airline to fully restore its capacity to the pre-pandemic level at full speed, actively expand its passenger and cargo flight network, and continuously enhance its service quality in order to further support the reinforcement and enhancement of Hong Kong's status as an international aviation hub.

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