Shareholders of Hong Kong-based carrier Cathay Pacific Airlines have approved a recapitalisation plan to raise $5 billion from the government, the media reported.
The decision to seek a bailout package was made by Cathay Pacific during a general meeting held on July 13.
All resolutions put to vote were approved, the airline said in a statement which was released after the general meeting which was held in Hong Kong.
Reportedly, three resolutions and two special resolutions were put up for voting at the meeting. These include approving the issue of preference shares to Aviation 2020 – a limited company wholly owned by the government — as well as approving a HK$11.7 billion rights issue.
Last month, Cathay Pacific Chairman Patrick Healy said it was the bailout was the only way to save the airline from collapse. Cathay’s main shareholders Swire Pacific, Air China and Qatar Airways said then they would vote in favor of the plan.
In June, media houses reported that the government in Hong Kong has announced a HK$30 billion bailout package for the struggling carrier Cathay Pacific in the form of loan and an undisclosed stake.
This marks the first time the government of Hong Kong has invested in a private company.
The bailout package will help Cathay Pacific weather the coronavirus pandemic.
Reportedly, Cathay Pacific will issue new shares as a part of the deal and it will also see government authorities taking up two seats at its boardroom.
In a statement, the carrier said, “Cathay Pacific has explored available options and believes that a recapitalisation is required to ensure it has sufficient liquidity to weather this current crisis.”