Air China (HKG:0753, SHA:601111) signed an agreement to proceed with the second tranche of a capital increase in Shenzhen Airlines, according to a Friday Hong Kong bourse filing.
Under the agreement, Air China and Kunhang Investment will inject a combined 11.9 billion yuan into Shenzhen Airlines.
Air China's contribution totals 6.1 billion yuan and will be made through five Airbus A350 aircraft and cash, while Kunhang Investment will contribute 5.8 billion yuan in cash.
The transaction is part of Shenzhen Airlines' previously announced 16 billion yuan equity financing plan.
Upon completion, Air China will retain its 51% stake in Shenzhen Airlines, which will remain a subsidiary of the carrier.
Hong Kong-listed shares of the airline were up over 10% in Monday morning trade.
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