Monday, 24 September 2007

Battle for Shanghai

Cathay Pacific, the Hong Kong-based airline and its ally Air China are expected to make a combined offer for a significant stake in China Eastern Airlines. Cathay’s move, which will build on Air China’s existing 11% stake in China Eastern, is expected to trigger a bidding war for effective control of the routes owned by China’s third-largest carrier.

Cathay and Singapore are desperate to expand their operations in China the world’s fastest-growing aviation market and see China Eastern, with its dominance of the Shanghai hub, as vital to that. Since Singapore announced its intention to build a stake in China Eastern three weeks ago, analysts at Citigroup have flagged the strong possibility Air China would respond robustly.

Singapore’s purchase has yet to receive the approval of shareholders at a meeting in December. It is understood that Air China and Cathay may be preparing to thwart that approval by organising a two-thirds majority vote preventing the stake-sale to Singapore. Singapore Airlines, meanwhile, could use a large stake in China Eastern to turn Shanghai into a hub connecting its international network with a domestic Chinese one.

Despite its strategic importance in the region, China Eastern has been criticised by investors as one of the few airlines that have managed to make a loss despite the booming growth of Chinese air travel. In 2006, it plunged more than 3.3 billion yuan (£218 million) into the red. (source: Timesonline)

Former Dragons' Den judge Doug Richard has raised $6.5m (£3.2m) for his new venture, Trutap, a free mobile phone service targeted at 18 to 24-year-olds.

This venture lets mobile users send instant messages to friends via companies such as MSN and Yahoo!, as well as offering blog and photo-sharing sites. The latest tranche of investment comes from Tudor Investment Corporation a US financial group.

Richard said "we see huge market demand in our service. This new infusion of capital will enable us to continue broadening our services and accelerate our leadership position in the industry." Trutap already operates in over 200 countries with plans in place to broaden its geographic scope in the coming months.

"Our key market is the 18 to 24-year-olds who feel real anxiety when they are unable to communicate with their friends continuously. Missing out on recent news, a piece of gossip, a new picture, a drink invite or a night out with pals is a real concern to them." said Richard. (source: Independant)

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