Hainan Airlines restructures department stores

Hainan Airlines (900945.SZ) said over the weekend it will restructure the operations of two competing Shaanxi province-based retail companies under its control, the Oriental Morning Post reported. Under the deal, Xi’an Minsheng Group (000564.SZ) will take over the retail assets of Baoji Department Store Group (000796.SH), which will in turn take over the onboard food operations of Hainan Airlines. The airline is the largest shareholder of both companies, controlling 19.16% of Xi’an Minsheng and 17.38% of Baoji Department Store. Following the restructuring, Xi’an Minsheng will be responsible for retail, Hainan Airlines will control flight operations and Baoji Department store will handle onboard catering. Baoji Department Store posted $1.46 million (RMB10.1 million) in net profits during the first quarter, and is worth $28.12 million (RMB194 million) in market capitalization. Separately, Hainan Airlines said Friday it was planning a RMB2.7 billion corporate bond issue to improve its debt structure.