Chinese Cargolux deal ready for take-off

(CS/mig) Chinese investment group HNCA has received the seal of approval by both the outgoing and incoming government to buy a 35 percent share in freight airline Cargolux.

HNCA will acquire the share directly or indirectly for 231 million USD, government “formateur” Xavier Bettel said, adding that the investment group has agreed to create a 15 million USD guarantee fund to absorb possible losses.

Minister for Sustainable Development Claude Wiseler, who had urged Bettel to follow-up on the Chinese proposal during coalition negotiations, commented that the outcome of the talks was a good deal, with the airline receiving a positive financial and commercial orientation.

Minister of Economy and Foreign Trade Etienne Schneider meanwhile said the partnership was a chance to participate in the Chinese project. One of HNCA's priorities is to boost Zhengzhou Airport and increase the presence of cargo airlines in a region known for its manufacturing industry.

The agreement is a further sign of tighter economic ties between the Grand Duchy and China. Only recently a third Chinese bank opened its headquarters in Luxembourg, and a fourth is reportedly considering a similar move.

Additionally, a newly founded China-Luxembourg Chamber of Commerce recently hosted its first event on the internationalisation of renminbi.

When the deal will be closed was not announced on Thursday. However, it is clear that HNCA will have a blocking minority.

While Luxembourg union OGBL had warned the new coalition partners of granting HNCA a blocking minority, Bettel commented on Thursday that no-one was “lining up” to go into business with Cargolux.