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Korean Air to acquire China Okay
(Reuters)
Updated: 2005-08-23 07:09

SEOUL, South Korea -- South Korea's biggest airline Korean Air Co. said it has signed a preliminary agreement to take over China's Okay Airways to target booming air cargo and passenger demand in China, Reuters reported.

A passenger liner of the Okay Airways, China's first private airline, landed on an airport in Changsha, March 11, 2005. [newsphoto]
The announcement came after Korean Air said in June it was in talks with China's first private airline on a possible joint venture.

Korean Air would finalise pricing, acquisition terms as well as timing after due diligence, Korean Air said in a statement.

Under Chinese regulations, a foreign company is allowed to buy a stake of up to 25 percent in a Chinese airline, while the combined stakes held by foreign investors are limited to 49 percent, the statement said.

Okay Airways, based in the northern Chinese city of Tianjin, started flights early this year. It subleased its first two Boeing 737-900s from Korean Air.

China has opened the market to allow private airlines and also to let in overseas investment.

Shares in Korean Air were down 0.5 percent at 18,750 won by 0135 GMT, versus 0.99 percent rise in the broader market



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