Air China set for London listing

AIR CHINA, the nation's biggest international carrier, with strategic backing from Cathay Pacific, plans to raise up to $1.1bn (£600m) in London and Hong Kong next month.

It will be the first listing on the London main board of a Chinese company in four years since ChinaPetroleum and Chemical Corp, and will give a significant boost to the City's bid to attract more of the country's companies.

The offering, which will be used to buy aircraft and repay debt, is much larger than analysts expected. The airline plans to fix the price of its shares in the week of 6 December and start trading on both exchanges the following week.

Air China was originally expected to raise less than half the amount, but increased the offering after Cathay committed to buying a 9.9% stake.

The company is offering 2.8bn shares - 31% of the total - at between HK$2.35 (16p) and HK$3.10 each. The company may offer 420.8m more shares depending on demand.

Beijing-based Air China was created in October 2002 after the old Air China merged with China National Aviation and China Southwest Airlines.

The company has ambitious expansion plans and will reportedly spend 18.7bn yuan (£1.25bn) buying 46 aircraft by 2006 and building an airport terminal.