Air China may sell 10 percent stake to Lufthansa ahead of listing

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 ◆ Air China may sell 10 percent stake to Lufthansa ahead of listing

Chinese flag carrier Air China is willing to sell a 10 percent stake to Germany's Lufthansa ahead of its planned Hong Kong stock market listing.

According to the Chinese-language newspaper Sing Tao Daily, Air China is targeting the sale of about 28 percent of its equity shares in an initial public offering (IPO) to raise between 500-800 million US dollars.

The IPO may come as early as next month.

The paper added that Lufthansa had yet to decide whether to buy into Air China , mainly because the mainland carrier said it would not pay dividends for at least several years.

"Air China has never announced such a plan," company spokesman Wang Yongsheng said in response to the article.

According to the daily, Air China will use proceeds from the IPO to buy 39 new aircraft over the next two years -- 14 aircraft in the second half, 15 in 2005 and 10 in 2006.