Shun Tak to take stake in Macau low-cost airline-paper - Friday 12th of August 2005

Air Macau Co. Ltd. will control a 51 percent stake in the venture and its parent China National Aviation Co. (CNAC) (1110.HK: Quote, Profile, Research) will hold the rest, the paper said, quoting unidentified sources.

Shun Tak has already signed an agreement that Air Macau and CNAC will hold the majority stake in the low cost carrier, the paper said.

Air Macau will also transfer 22 routes to the new carrier, including 11 routes to mainland China and the rest to cities in the Philippines, South Korea and Vietnam, it said.

The venture is the third airline scheduled to start operation in 2006 since Macaus government cut short Air Macaus monopoly two years ago.

Shares in Shun Tak ended on Monday at HK$7.

The stock had gained 2 percent in the last month but is up 81 percent in the last year as investors bet on strong growth prospects for Macaus gaming and tourist industries.

The tiny territory is the only place in gambling-mad China where casinos are legal and companies from around the world are pouring in billions of dollars to build more opulent gaming parlours, plush hotels and shopping malls.

CNAC owns a 43 percent of Hong Kong carrier Dragonair and 51 percent of Air Macau.

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