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China Travel to sell assets to parent

Published: 23 Jun 2009 23:28:00 PST

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Jun. 24, 2009 (China Knowledge) - China Travel International Investment Hong Kong Ltd<0308> plans to sell its entire 100% equity interest in China Travel International Ltd (CTIL) and a 25% equity interest in China Travel International (Hangzhou) Ltd to its parent, China Travel Services, also known as CTS Group of China.

China Travel said in a statement filed with the Hong Kong Stock Exchange that it plans to raise about HK$205.34 million from the sale.

Around HK$200 million of the proceeds will be used to replenish working capital, according to China Travel's statement.

China Travel, which has the option to repurchase the assets, thinks the sale will contribute to a healthy financial performance. Meanwhile, its parent firm will benefit from the acquisition through further integration of travel its agency businesses.

CTIL currently operates several travel agencies in thirteen domestic provinces and municipalities, providing services in outbound travel, mainland travel, business travel and guide services, while China Travel International (Hangzhou) mainly operates travel tours and provides ticket services.

In March, a representative of China Travel revealed that the firm will receive a transfer of travel-related assets from China Travel Services, and that China Travel Services will not seek an independent IPO on the domestic stock markets. The move is aimed at consolidating the group's travel brands.

H-shares of China Travel fell 3.55% to close at HK$1.63 on Tuesday.

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