Cathay Pacific to gain full control of cargo carrier with $282 mln DHL deal

SINGAPORE, Nov 13 (Reuters) - Hong Kong's Cathay Pacific

Airways Ltd on Monday said it would sell eight

freighters to DHL International for HK$2.199 billion ($281.89

million) and lease them back as part of a deal to gain full

control of cargo airline Air Hong Kong.

Cathay owns 60 percent of Air Hong Kong, with Deutsche Post

AG unit DHL International holding the remainder.

However, the Hong Kong airline said in a statement its stake is

expected to rise to 100 percent after a joint venture agreement

expires at the end of 2018.

The pair had agreed to a non-binding memorandum of

understanding in July before finalising the deal and announcing

the aircraft sales price on Monday.

Cathay said proceeds from the freighter sale would be

applied to the general working capital requirements of Air Hong

Kong, and the cargo carrier would operate an agreed freighter

network to Asian destinations for DHL.

Completion of the sale of five A300-600F freighters is

expected by Dec. 31, with three more to be sold by the end of

next year.

The sale has been finalised at a time of improved cargo

market conditions. Cathay in August reported a 12 percent rise

in first-half cargo revenue and said the outlook for the rest of

the year was strong - an important bright spot for the firm

after it logged its worst half-loss in at least 20 years.

DHL was not immediately available for comment.

($1 = 7.8008 Hong Kong dollars)

(Reporting by Jamie Freed; Editing by Sherry Jacob-Phillips)