Cathay Pacific Shares Rise on Plans to Repurchase $866 Million Worth of Bonds

Dow Jones11-15

By Kimberley Kao

Cathay Pacific Airways shares jumped after it said it plans to repurchase about US$866.20 million worth of convertible bonds, signaling positive shareholder returns.

Shares rose as much as 16% in early trade, before paring gains to 9.6% by midday Friday. The carrier's shares are up around 8% year to date and on track for their best one-day gain in four years.

The Hong Kong airline said Friday it plans to repurchase 6.74 billion Hong Kong dollars worth of 2.75% convertible bonds due 2026, equivalent to US$866.20 million, using internal cash and debt financing.

Cathay said in an exchange filing that the repurchase and subsequent cancellation of the bonds reflects the company's confidence in the long-term business outlook and could boost shareholder returns, it said.

"The early redemption of the convertible bonds is a positive signal," reflecting management's positive outlook for earnings and free cash flow generation, DBS Group Research analyst Jason Sum said in an email.

It also eliminates dilution risk for shareholders, he said.

The analyst expects Cathay's free cash flow to get a further hand from lower capital expenditure amid Boeing and Airbus aircraft delivery delays.

HSBC, Morgan Stanley, BOC International and BNP Paribas are acting as dealers for the debt repurchase.

Write to Kimberley Kao at kimberley.kao@wsj.com

(END) Dow Jones Newswires

November 14, 2024 23:41 ET (04:41 GMT)

Copyright (c) 2024 Dow Jones & Company, Inc.

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The carrier's shares are up around 8% year to date and on track for their best one-day gain in four years. \n\n\n  The Hong Kong airline said Friday it plans to repurchase 6.74 billion Hong Kong dollars worth of 2.75% convertible bonds due 2026, equivalent to US$866.20 million, using internal cash and debt financing. \n\n\n  Cathay said in an exchange filing that the repurchase and subsequent cancellation of the bonds reflects the company's confidence in the long-term business outlook and could boost shareholder returns, it said. \n\n\n  \"The early redemption of the convertible bonds is a positive signal,\" reflecting management's positive outlook for earnings and free cash flow generation, DBS Group Research analyst Jason Sum said in an email. \n\n\n  It also eliminates dilution risk for shareholders, he said. \n\n\n  The analyst expects Cathay's free cash flow to get a further hand from lower capital expenditure amid Boeing and Airbus aircraft delivery delays. \n\n\n  HSBC, Morgan Stanley, BOC International and BNP Paribas are acting as dealers for the debt repurchase. \n\n\n \n\n\n  Write to Kimberley Kao at kimberley.kao@wsj.com \n\n\n \n\n\n  (END) Dow Jones Newswires\n\n\n  November 14, 2024 23:41 ET (04:41 GMT)\n\n\n  Copyright (c) 2024 Dow Jones & Company, Inc.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"1","news_tag":"shareholding","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.3","shortVersion":"4.29.3","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2483947363"}