Posted by: mel | May 21, 2009

Soros, Chinese Group Eyeing Takeoff With Local Logistics Firm

Jakarta Globe | Janeman Latul | 19 May 2009

US-based billionaire financier George Soros and a diversified Chinese business group are teaming up to acquire a minority share in PT Global Putra.

Their goal? To capitalize on Indonesia’s fast-growing aviation sector and launch direct flights between Shanghai, Beijing and Jakarta. Global Putra is a local logistics and cargo company.

Officials said that HNA Group, a $13 billion company that operates 13 airports in China as well as hotels, airlines and other aviation-related businesses, signed a master agreement on Monday with Global Putra. They plan on developing air passenger and cargo services, as well as airport management and hotel businesses.

 I hope that Global Putra will to continue to hold a majority stake in the new company,” Jusman Syafii Djamal, the transportation minister, said on Tuesday.

He emphasized the government’s preference that the local company remain the majority shareholder, similar to how PT Indonesia AirAsia is structured. Indonesia AirAsia is 49 percent owned by Malaysia-based AirAsia, with a majority stake held by local companies.

However, Sumadi Kusuma, Global Putra’s chief executive, said that HNA Group could ultimately become the majority owner.

“Since HNA Group is making the investment, they may become the majority shareholder, but it isn’t finalized yet,” he said.

HNA Group’s size and reach, Sumadi said, will benefit Indonesia through the joint venture, adding that negotiations are ongoing to determine the investment value. HNA, a China Fortune 500 company, owns several regional Chinese airlines, including Hainan Airlines, Shanxi Airlines, Chang’an Airlines, and China Xinhua Airlines.

In November 2007, HNA merged all of its subsidiaries into Grand China Air, which owns 250 aircraft and is expected to become China’s fourth largest airline.

Grand China Air’s parent company is Grand China Airlines Holding Corp., which is owned jointly by the Hainan provincial government with 48.6 percent, Soros with 18.6 percent and the HNA group with 32.8 percent.

Sumadi said HNA Group, through Hainan Airlines, is considering launching direct routes from China’s government and financial capitals.

“If we could fly directly to Indonesia, why should we fly through Singapore, right? This is a big opportunity for Indonesia,” Sumadi said.

Hainan Airlines, he said, also plans routes to Denpasar, Bali and Yogyakarta, which could spur investment in the Bali and Central Java tourism industries.

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