Chapter 967: Flawless Cathay Pacific

"Chairman, the situation of Cathay Pacific Airways is indeed very complicated, so the data collection work is relatively slow, and I have kept you waiting.'

After handing over the information to Xia Yu, Fok Kin-ning explained a little apologetically.

After all, Jiuding Securities and Jiuding Newspaper Company are both experts at collecting business information and have a lot of information themselves. He felt a little embarrassed that it had taken him three days in this case.

Xia Yu smiled indifferently, told him to sit down, and then flipped through it.

It took nearly 20 minutes to look through it.

The situation of Cathay Pacific is indeed very complicated.

Xia Yu should say that it is worthy of being one of the core companies of the Swire group, not only involving a wide range of businesses, but also doing a very rigorous job in terms of corporate control.

According to the data, Cathay Pacific is a core member of the Swire group, but in reality it is a third-tier subsidiary, or even a fourth-tier subsidiary.

However, considering that the business in Hong Kong and even in Asia is handled by the Hong Kong and Shanghai Group, which is separate from the John Swire & Sons group in London, Xia Yu regards the Hong Kong and Shanghai Group as the core entity of the Hong Kong and Shanghai Swire group.

John Swire & Sons (H.K.) Limited is not listed, and is 62% controlled by John Swire & Sons Limited. It is a no-brainer: no chance.

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In terms of the shareholding structure, the Swire group holds 34% of Swire Pacific Limited's shares, followed by the Swire family, who hold 17% through a discretionary family trust, the Khoo family of Singapore, who hold 7.8%, the Song family of Hong Kong, who hold 6.7%, HSBC, who hold 6.1%, Jiuding Securities, who hold 4.9%, Standard Chartered Bank, who hold 4.5%, and Jiuding Insurance, who hold 3.8%.

Although the three companies on the Jiuding consortium secretly hold 13.2% of the shares, Xia Yu does not stand a chance of taking over Swire Pacific Limited.

This is because the Swire Pacific Group and the Shih Yahuai Family Trust together hold 51% of the shares, a shareholding ratio that puts everyone off.

This was not the case in previous years, but since Xia Yu has been hunting down British conglomerates one after the other, the Swire family has been scared into increasing their shareholding, and this is the situation that has arisen. Xia Yu can't blame anyone for this, as he himself is to blame for not going after the Swire conglomerate directly in the first place, and has already missed his chance.

Under Swire Pacific Limited are three secondary subsidiaries directly under it, namely Swire Properties Limited, Swire Pacific Limited and Swire Beverages Holdings Limited.

None of these three companies are listed, and they are all 100% controlled by Swire Pacific Limited.

So Xia Yu had no way of taking action at this level.

He could only continue looking down the hierarchy for opportunities.

Under Swire Pacific Limited, there are three third-level subsidiaries, namely Hong Kong Airport Services Limited, Cathay Pacific Airways Limited, and Hong Kong Aircraft Engineering Company Limited.

Of these three companies, the most important is undoubtedly Cathay Pacific Airways!

Unfortunately, Cathay Pacific Airways is not listed.

In terms of the company's shareholding structure, the parent company Swire Pacific owns 42%, HSBC 20%, the Hong Kong Sung family 16%, Standard Chartered Bank 13%, and the sister companies Hong Kong Airport Services 5% and Hong Kong Aircraft Engineering Company 4%.

Although Cathay Pacific is not a listed company, its parent company Swire Pacific is, so it still has to publish financial reports on a quarterly and annual basis.

Last year, Cathay Pacific Airways achieved operating income of 2.16 billion Hong Kong dollars, transported 2.15 million passengers annually, and had a net profit of 470 million Hong Kong dollars.

In terms of company assets, the most important ones are the aircraft. The company owns 21 aircraft, including six Boeing 747 series aircraft, including three of the best Boeing 747-200s. The company's total assets are as high as HK$3.74 billion, and its net assets are HK$1.72 billion. The asset-liability ratio is 54%, which is not considered high.

In terms of detailed assets, apart from aircraft, the more important ones are the shares held and subsidiaries.

Cathay Pacific owns 24.8% of its sister company Hong Kong Aircraft Engineering Company and 4% of Hong Kong Airport Services.

In addition, there are four fourth-level (group level) subsidiaries, namely the wholly-owned Hong Kong's largest laundry factory, Vogue Laundry Service, a 51% stake in Aviation Security Company Limited, a wholly-owned Cathay Pacific Cargo, and a 51% stake in Air Catering Services.

These four subsidiaries provide a favourable guarantee for Cathay Pacific's services.

Unfortunately, these four subsidiaries are either wholly owned by Cathay Pacific or have a 51% shareholding, so Xia Yu can't do anything about them.

And to be honest, if these four companies weren't subsidiaries of Cathay Pacific, they wouldn't have developed so well. So even if Xia Yu acquired them, they would decline after losing the business of Cathay Pacific.

So Xia Yu can only look for opportunities at the level of Cathay Pacific and its sister companies.

But the chances are almost non-existent.

This is because Cathay Pacific, Hong Kong Airport Services and Hong Kong Aircraft Engineering Company all have cross-shareholdings.

In Cathay Pacific, parent company Swire Pacific is the largest shareholder with a 42% stake, while Hong Kong Airport Services and Hong Kong Aircraft Engineering Company are the fifth and sixth largest shareholders, with 5% and 4% stakes respectively.

The three companies together hold 51% of Cathay Pacific Airways!

Even if Standard Chartered Bank itself holds 13%, Xia Yu has also secured HSBC and the Song family, with a combined shareholding of only 49%, which cannot shake the Swire consortium's domination of Cathay Pacific Airways!

Hong Kong Aircraft Engineering Company was listed in 1965, with the parent company Swire Pacific as the largest shareholder, with a 26.2% stake; the second largest shareholder is Cathay Pacific Airways with a 24.8% stake.

The two combined for 51%!

Although now Jiuding Securities holds 17.7% (formerly owned by the Jardine Matheson Group), and Standard Chartered Bank holds 10.09%, together they only have 28.6%, which is not enough to buy the 8.4% held by HSBC and the 12% held by the public.

Not to mention that the public's shares can never be bought out in their entirety, unless the company is privatised.

If HKE cannot be acquired, then its 4% stake in Cathay Pacific cannot be acquired either.

Then there is HKEAS.

This company was established in 1961 by the Swire Group, Jardine Matheson Group and Hutchison Whampoa, with Swire Group owning 45%, Jardine Matheson Group 40% and Hutchison Whampoa 15%.

However, two years ago, when Jardine Matheson Group was dismembered, the 40% stake held by Jardine Matheson Group was bought by Chinese tycoons.

Cao Guangbiao, the tycoon of the Yongxin Group, bought 24%, and Huo Yingdong bought 16%. As for the 15% stake belonging to Hutchison International, it entered Hutchison Whampoa after the merger with Whampoa Dock, and Hutchison Whampoa was in turn acquired by Xia Yu, so this 15% stake is now in the hands of Jiuding Industrial Group.

The 45% originally owned by Swire Pacific Aviation was transferred to Cathay Pacific Airways, leaving Swire Pacific Aviation with a 41% stake.

However, regardless of the transfer, Swire Pacific and Cathay Pacific still held a combined 45% stake in Hong Kong Airport Services.

This was the only company in which the Swire consortium did not hold more than 50% of the shares.

And since HKGAS is not listed, and the other two shareholders are both Chinese tycoons, namely Tsao Kuang-piu and Fok Ying-tung, Xia Yu is very confident of taking over their shares.

But even if he takes over their shares, together with the 15% he already owns, that's only 55%, not 67%, and he simply cannot control the board of directors.

The veto power of Swire Pacific can block all important proposals, just like the proposal to sell the company's 5% stake in Cathay Pacific!

So this place that seems most likely to succeed is actually a dead end!

Even Xia Yu, who prides himself on being well-informed and resourceful, is filled with worry when faced with this situation, which is interlocked and flawless.

It's hard...

Is there really no chance?

Xia Yu thought with a headache.