Air China and the Macao Government, Air Macau’s largest shareholders, approved the proposal to increase capital for the local airline on Monday at the Extraordinary General Assembly, to mitigate the heavy impact of the COVID-19 pandemic on the aviation sector.
The Air Macau spokesperson confirmed with Tribuna de Macau that Air China and the Macao government reached an agreement to proceed with the financial capital injection but declined to disclose the numbers, saying only that the details should be made available by the government in the Official Gazette.
Tribuna de Macau newspaper wrote, however, that a knowledgeable source indicated that the value of the capital could be increased to more than MOP 2 billion, in a two-phase operation.
At the end of November, Air Macau specifically called the Extraordinary General-Assembly to deliberate on the “use of new cash inflows” and the amendment of articles five and six of the Company’s Articles of Association, which relate to the share capital.
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 government currently holds 21.5% of the company’s capital, equivalent to MOP 52 million, becoming the carrier’s second largest shareholder following a capital increase in 2011 of MOP 442 million.
This will 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%.
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%), 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.