UBS: The allocation of CATHAY PAC AIR (00293) shares will lead to a 0.7% increase in the market value of Swire Pacific A (00019).

UBS released a research report stating that Swire Pacific Ltd (00019) announced that it will sell its stake in CATHAY PAC AIR (00293) through a placement at HK$11.74 per share, raising HK$1.789 billion. Swire Pacific stated that the placement of shares was in response to CATHAY PAC AIR's repurchase of the 9.6% stake previously held by Qatar Airways, to bring its shareholding closer to historical levels. After the sale, Swire Pacific's actual shareholding in CATHAY PAC AIR is expected to decrease to 45.12%. UBS estimates that the sale will increase Swire Pacific's market value by approximately 0.7%, and the company's net debt-to-equity ratio may improve from 20.6% at the end of last year to 20%. The bank believes that the sale is similar to the situation last month when another strategic shareholder, Air China Limited (00753), sold its stake in CATHAY PAC AIR, and Swire Pacific remains confident in its aviation business.