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Luxembourg to sell Cargolux stake to Chinese investors

Wednesday, 18 Dec 2013 | 7:55 AM ET

LUXEMBOURG, Dec 18 (Reuters) - Luxembourg is to sell its 35 percent stake in cargo airline Cargolux Airlines International to a Chinese investor for $120 million, the government said on Wednesday.

Luxembourg bought a 35 percent stake in the airline from Qatar Airways in December 2012 for $117.5 million, after the two airlines disagreed over management and strategy.

The government, which had always said it would sell on the stake, will now sell it at a small profit to investment vehicle Henan Civil Aviation Development and Investment Co (HNCA).

HNCA will also participate in a capital increase with up to $61.25 million and put $15 million in a development fund.

"The government has decided to sell its 35 percent stake in Cargolux to HNCA," Francois Bausch, minister for sustainable development, said.

The transaction will still have to be approved by Chinese regulators but the Luxembourg government said it expected the deal to close in March at the latest.

Cargolux's other shareholders include national airline Luxair with 43.4 percent and state-owned Luxembourg banks BCEE with 10.9 percent and SNCI with 10.7 percent.

(Reporting by Michele Sinner; Writing by Robert-Jan Bartunek; Editing by Greg Mahlich)