China Eastern, China Southern receive capital injections

China Eastern Airlines and China Southern Airlines have each received a US$437 million capital injection to reduce debt burdens, the Financial Times reported. The moves are expected to spark short-term rallies when the companies’ shares – which have been suspended since November 27 – resume trading today in Hong Kong. China Southern did not provide details, but noted that its capital injection would not take place until after February and would require shareholder approval. China Eastern will issue more than 652 million H-shares and A-shares each to parent China Eastern Air Holding, with A-shares at an 8.4% discount to their last traded price, and H-shares at a 50.9% premium.