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China Southern trade suspended, awaits cash boost
Published on: 2010-02-23
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SHANGHAI — Shares in China Southern Airlines were suspended Tuesday after the nation's biggest carrier by fleet size said it expected a government cash injection of 1.5 billion yuan (220 million dollars).

China's finance ministry awarded the funds to the airline's parent, China Southern Air Holding Company, to support its core business development, the firm said in a statement.

The airline and its parent company were discussing possible arrangements to use the cash to reduce the firm's debt ratio, according to the statement filed with the Shanghai Stock Exchange late Monday.

China Southern said it expected to issue another statement within 10 trading days to confirm the capital injection, at which point trading in its shares would resume.

The airline, which last month announced it would buy 20 Airbus A320 planes, had previously said it would return to profitability in 2009 after posting a net loss of 482.9 million yuan in 2008.

Chinese carriers have benefited from a recovery in air travel demand spurred by the country's resilience during the financial crisis -- the world's third-largest economy expanded by a red-hot 8.7 percent last year.

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