The Macao government is expected to make a capital injection into Air Macau – which will be the company’s third capital increase since 2009 – due to the company’s financial situation as a result of the COVID-19 pandemic, Tribuna de Macau newspaper writes today.
The paper reveals that Air Macau has called an Extraordinary General Assembly for 7 December with a view to discussing and deliberating the restructuring of the company’s share capital, namely the “increase of the company’s share capital by means of new cash payments” and the amendment of articles five and six of the company’s Articles of Association.
Air China issued no communication to the capital market to call a meeting with shareholders, contrary to what happened in 2009, when the company approved an increase in capital for Air Macau up to MOP 400 million (US$50.12 million).
China National Aviation Corporation (Macau) Company Limited – integrated in the “managed holding” by Air China – is Air Macau’s largest shareholder, with around 66.9 per cent of the share capital, equivalent to MOP 161.9 million.
The Macao SAR currently holds 21.5 per cent of the company’s capital, equivalent to MOP 52 million – it became the carrier’s second largest shareholder following a capital increase in 2011 of MOP 442 million, fully subscribed by the government, which spent MOP 700 million on the operation.
This will thus be the third restructuring of Air Macau’s share capital since 2009, the first of which was carried out to prevent the company’s bankruptcy, following the radical rise in fuel prices.
In 2011, the capital increase was used to update the aircraft fleet and this year, the capital increase comes after the company recorded huge losses.
After accumulating profits of more than MOP 1.6 billion over the course of 10 years, Air Macau suffered net losses of RMB 464 million (MOP 539.5 million at the current exchange rate) between January and June this year, according to Air China data published in August.
In the semestral report sent to the Shanghai Stock Exchange, Air China also mentioned that Air Macau’s revenues amounted to RMB 457 million (MOP 531.4 million) in the first half of 2020, which translates into an annual drop of 75.34 per cent.
In addition to Air China and the Macao SAR government, Air Macau also has as shareholders Sociedade de Turismo e Diversões de Macau (STDM) (11.57 per cent), and Evergreen Airways Service (Macau) Ltd, IPE (Macau) – Investimentos e Participações Empresariais, SARL, The World Trade Center Macau, SARL, and Companhia de Seguros de Macau, SA, with minimal participation.
At the end of June, the company’s fleet comprised 22 aeroplanes, all manufactured by Airbus, with an average age of 6.55 years.
As part of the fleet renewal, the carrier received three A320neos from BOC Aviation in April, May and June 2019, and an A321neo, delivered by Air Lease in December.