China Eastern Airlines to raise up to $2.2 billion in share sale

China Eastern Airlines, a Shanghai-based air transportation company, plans to raise up to $2.2 billion in a share sale to expand its fleet and to replenish working capital.

China Eastern will use $1.78 billion proceeds from the share sale to fund the purchase of 18 airplanes, 15 flight simulators, and 20 backup engines and the remaining $452.4 million will be used to boost its working capital.

The Shanghai-based Juneyao Airlines and its controlling shareholder Juneyao Group will spend a combined $1.93 billion in China Eastern’s share sale. Juneyao Airlines and Juneyao are expected to own more than 5 percent stake in China Eastern Airlines if they fulfill the upper limit of the proposed share subscriptions.

In 2015, U.S. Delta Air Lines, a founding member of SkyTeam, bought a 3.55 percent stake in China Eastern for $450 million and has an observer seat on its board.