Cathay Group completes repayment of HK$19.5 billion investment from Hong Kong SAR Govt

The Cathay Group has announced the complete repayment of the HK$19.5 billion (US$2.5 billion) investment made by the Hong Kong Special Administrative Region (HKSAR) Government to support the airline during the COVID-19 pandemic.

This milestone marks a significant step in the airline's financial recovery and its commitment to rebuilding for the future.

The repayment was finalized with the Cathay Group buying back the remaining 50% of preference shares, valued at HK$9.75 billion, issued to the HKSAR Government during the airline’s 2020 recapitalisation.

The initial 50% of these preference shares had been repurchased in December 2023.

Alongside this, Cathay has also paid the remaining preference share dividends up to 31 July 2024, bringing the total dividends paid to HK$2.44 billion.

Cathay Group Chief Executive Officer Ronald Lam expressed his gratitude for the government's support: "Today marks an important milestone for Cathay as we fully repay the invaluable support that the HKSAR Government provided to us during our recapitalisation. Our journey to rebuild Cathay for Hong Kong has been progressing well and this has enabled us to fully redeem the preference shares only 18 months after Hong Kong reopened. We are extremely grateful for the support and guidance that the HKSAR Government, its two observers to the Board, and all of our shareholders have shown Cathay, both during and since the pandemic."

Lam further emphasized the airline’s future focus: "As we turn the page on this significant chapter in Cathay’s history, our focus now is firmly on the future. We continue to make substantial investments to grow Cathay for the long term, and deliver on our ongoing commitment to being a positive driving force supporting Hong Kong’s international aviation hub development."

The Cathay Group's 2020 recapitalisation package, amounting to HK$39 billion, was structured in three tranches:

• Issuance of HK$19.5 billion preference shares with warrants to the HKSAR Government.


• An HK$11.7 billion rights issue of ordinary shares to existing shareholders.


• A HK$7.8 billion bridge loan facility provided by the HKSAR Government, which was not utilized and expired on 8 June 2023.

In addition to repurchasing the preference shares and paying the associated dividends, Cathay Group also made its first dividend payment to ordinary shareholders since 2019 in May this year, totalling HK$2.8 billion.