Cathay to pay deferred dividend to HK government as fortunes rise
CATHAY Pacific Airways will pay an outstanding dividend of HK$1.52 billion (S$261.5 million) to the Hong Kong government at the end of the month, in another sign the carrier’s financial fortunes are turning the corner after Covid.
Hong Kong’s flagship airline also said it won’t need to utilise a government HK$7.8 billion bridge loan that’s due to expire later this week. The outstanding dividend payment on the preference shares held by the Hong Kong government will be made on Jun 30, it added.
Cathay chief executive officer Ronald Lam said the repayment reflected his confidence in the airline and its financial health.
“Our journey of rebuilding Cathay for Hong Kong is on the right track, and now is the appropriate time to begin repaying the support that the government has shown us,” Lam said.
“As travel restrictions get lifted and travel demand returns, our group, further to being overall operating cash generative in 2022, has continued to be operating cash generative so far in 2023.”
Cathay also said it will repay any obligations on future annual interest payments on time and start to redeem the preference shares “in due course.”
Cathay was bailed out by the Hong Kong government in June 2020 at the depths of the pandemic via a HK$19.5 billion lifeline consisting of preference shares and warrants.
Cathay Pacific and HK Express as a group aim to operate at around 70 per cent of pre-pandemic passenger flight capacity and cover some 80 destinations by the end of 2023. The company expects to return to pre-pandemic levels by the end of 2024. BLOOMBERG
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