Air China To Raise Fresh Capital (ZNH)

Air China (ADR) (OTC: AIRYY) has announced that it plans to raise $952 million in fresh capital.

Air China is the world’s largest airline in terms of market capitalization. The announcement shows that airlines are now becoming more confident of an economic rebound. Earlier this week, China Southern Airlines (ADR) (NYSE: ZNH) had announced its plans to issue $1.6 billion worth of shares.

Both the companies are taking private placement route to raise capital. Air China said the new capital will be used for augmenting working capital, and repaying existing debt. Repayment of debt is likely to save the company 345 million Yuan a year in interest expenses.