Cathay has bought back 50% of the Hong Kong SAR Government’s preference shares and plans to buy the remainder by the end of July 2024
December 4, 2023 --
The Cathay Group has reached another key milestone in its rebuild journey today and bought back 50% – HK$9.75 billion – of the HK$19.5 billion preference shares that were issued to the Hong Kong Special Administrative Region (HKSAR) Government as part of the Cathay Group’s recapitalisation financing in 2020.
The Cathay Group also intends to buy back the remaining 50% by the end of July 2024, subject to market conditions and its business operations at the relevant time.
In addition to buying back HK$9.75 billion of the preference shares, the Cathay Group will continue to pay dividends on the remaining preference shares as they fall due. To date, the Cathay Group has disbursed HK$1.97 billion in preference share dividends to the HKSAR Government.
At a glance
- Company
- Cathay Group
- Announcement
- Financing
- Location
- Hong Kong
Key figures
- Preference shares repurchased
- HK$9.75 billion
- Preference shares issued in 2020
- HK$19.5 billion
- Planned timing for remaining buyback
- by the end of July 2024
- Preference share dividends paid to date
- HK$1.97 billion
People
- Ronald LamChief Executive Officer
Cathay Group Chief Executive Officer Ronald Lam said: “We are extremely grateful to both the HKSAR Government and to our shareholders for the continued support they have provided both during and since the pandemic. The investment by the Government was essential in supporting the Cathay Group and upholding Hong Kong’s status as an international aviation hub through the COVID-19 crisis.
"That we have been able to redeem half of the preference shares is testament to the hard work of our people and the encouraging progress we have made in our journey to rebuild. We will continue to commit ourselves toward our vision to become one of the world’s greatest service brands and the pride of Hong Kong once again”.
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Questions around this news
Why did the Hong Kong SAR Government receive preference shares?
The shares were issued to the government as part of the group’s recapitalisation financing in 2020. Chief Executive Officer Ronald Lam said the government’s investment helped support the group and Hong Kong’s role as an international aviation hub during the COVID-19 crisis.
What are preference shares?
Preference shares are a class of shares that commonly gives holders priority over ordinary shareholders for dividend payments, if dividends are declared, and for repayment of capital if a company is wound up. Their terms vary, and they may have limited or no voting rights compared with ordinary shares.
What dividends has the group paid on the government’s preference shares?
The group said it had paid HK$1.97 billion in dividends to the Hong Kong SAR Government to date. It also said it would continue paying dividends on the preference shares that remain outstanding as those payments fall due.
