Qatar Airways buys 9.6% of Cathay Pacific from Kingboard

After falling almost 5%, Cathay Pacific's shares trimmed losses and were down around 1.5% in afternoon trading in Hong Kong.

The Middle Eastern airline has a 20% stake in British Airways parent IAG SA.

The seller, Hong Kong-listed Kingboard Chemical, said Qatar Airways would pay HK$13.65 a share, or almost HK$5.2 billion ($666 million) in total. This amounts to 9.61% of Cathay's shares.

Qatar Airways announced it intends to purchase a almost 10% stake in Hong Kong carrier Cathay Pacific Airways.

Cathay Pacific chief executive Rupert Hogg said as members of the Oneworld alliance, "we look forward to a continued constructive relationship". Cathay also has cross-shareholdings with mainland carrier Air China, which owns just under 30 percent.

"Cathay will have three major shareholders, all with different and potentially conflicting interests - Swire, Air China and Qatar Airways", said Corrine Png, CEO of transport research firm Crucial Perspective.

In August, Qatar Airways backed away from a similar plan to buy shares in American Airlines after the Texas-based carrier opposed the move.

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The purchase, the first by the Middle Eastern airline in an Asian carrier, may help the Doha-based company gain a toehold in the region and get access to mainland China that is set to emerge as the world's biggest aviation market within a decade. The two carriers codeshared on each other's services between the two cities, with Cathay also placing its CX airline code on Qatar-operated services beyond Doha to points in Europe, the Middle East and South America and Qatar adding its QR airline code on selected Cathay-operated flights to Australia, Japan, New Zealand and South Korea.

But American CEO Doug Parker cited that ongoing dispute in voicing his displeasure about Qatar Airways' since-dropped effort to buy a stake in American.

Qatar Airways will buy the stock for HK$13.65 per share, the statement said. The transaction will be completed later Monday, Qatar Airways said.

In a statement Kingboard said it would realize a profit of HK$800million on the cash sale that is expected to close in Hong Kong on November 06.

Kingboard founder Paul Cheung Kwok-wing had only piled up his stake in Cathay Pacific earlier this year and declared at the time that he was a "long-term investor".

Kingboard Chemical, a diversified group that is into the manufacture of laminates, glass yarn and copper foil, had built up the stake in Cathay Pacific through purchases from the stock market along with its associates.

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