China Southern Airlines has ratified that it is negotiating with American Airlines Group to sell some of its pay outs to American Airlines for an undisclosed sum.
The company further said that the introduced tie-up could involve a share issue and other forms of interaction.
Anticipated to enhance American Airlines’ presence in the Chinese market, the grapple with is subject to shareholder and government approval.
In a filing, China Southern Airlines believed: “As of the date of this announcement, the company is in the negotiation of a possible major crucial cooperation (the ‘possible cooperation’) with American Airlines, involving, mid others, proposed issue of shares of the company and other business teamwork.
“The company does not have any binding arrangement or definitive agreement in on to the ‘possible cooperation’.”
“The company wishes to emphasise that the ‘possible backing’ is subject to the internal approvals by the board of directors and shareholders (if applicable) of each confederate, possible approvals by the relevant governmental authorities, and the entering into of unavoidable final legally binding documents by the relevant parties thereto and the styles thereof.
“As of the date of this announcement, the company does not have any obligate arrangement or definitive agreement in relation to the ‘possible cooperation’.”
If materialised, the envisioned deal will help American Airlines to become the second US airline to own pieces in a Chinese carrier after Delta Air Lines, reported Reuters.
In 2015, Delta Air Descents purchased a 3.55% stake in China Eastern Airlines for $450m.