CHINA is set to stitch up a third of Virgin Australia following the sale of another chunk of the airline to a Chinese company.
A week after Virgin created a new partnership with the HNA Group, Air New Zealand has announced it’s selling the majority of its own shares to the Nanshan Group.
Under the deal, Nanshan will pick up a 19.98 per cent stake in Virgin and a place on the airline’s board of the directors.
The deal values Virgin Australia shares at 33 cents each — three cents more than the Virgin-HNA deal did.
It remains to be seen whether there will be any aviation benefit for travellers, as a result of the deal.
In a brief statement, a Virgin Australia spokeswoman said they “looked forward to meeting with the Nanshan Group over the coming weeks to discuss the proposed acquisition”.
Virgin Australia has already applied to begin direct flights next year to Beijing and Hong Kong as part of its new partnership with HNA.
The deal, announced last week, will see HNA take a 13.1 per cent stake in Virgin Australia initially with the option to increase its share holding to 19.9 per cent.
Singapore Airlines still holds a 19.8 per cent stake in Virgin, and Etihad Airways holds 21 per cent. Founder Richard Branson’s share was reduced to 8.7 per cent from ten per cent as a result of the HNA deal.
Air New Zealand Chairman Tony Carter said they believed Nanshan Group would be a very strong, positive and complimentary shareholder for Virgin Australia.
“The sale would allow Air New Zealand to focus on its own growth opportunities while still continuing its longstanding alliance with Virgin Australia on the trans-Tasman network,” said Mr Carter.
The Nanshan Group has an interest in the aviation industry, with its own emerging airline Qingdao Airlines, launched in 2014.
Ranked as one of China’s top 500 companies, Nanshan has operations across the US, Australia, Italy, Singapore, Indonesia and Hong Kong.
The group has a longstanding relationship with the Australian Woolmark Company, in developing leading-edge wool products at a jointly established research and development facility in China.
Shares in Virgin Australia rose on the back of this morning’s announcement from 28 cents to 29.7 cents a share.