TNAG-2549-FCO40-3724-Hong-Kong-Cathay-Pacific-Airways-1992 — Page 16

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15 JUL 1992

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CONFIDENTIAL

FROM: P F Ricketts

CM

MR Rigott, this

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17.

13/2

Hong Kong Department

DATE: 13 July 1992

cc: Private Secretary

Sir John Coles

Mr Broadbent,

Economic Advisers

Mr Hughs, AMD

Mr Dinham,

Government House,

Hong Kong, BY FAX

Any 13/7 As

CAAC PURCHASE OF SHARES IN CATHAY PACIFIC AIRWAYS

1.

Sir Adrian Swire telephoned me this morning to give some

of the background to the announcement in Hong Kong today (Hong Kong telno 1871) that the HSBC's 10% shareholding in Cathay had been sold to Chinese interests (5% each to CAAC

and to China Travel Service).

2.

He apologised

Sir Adrian recalled that he had mentioned in strict

confidence to the Secretary of State some months ago CAAC's interest in taking a 10% stake in Cathay.

Since then,

negotiations had continued intermittently. that it had not been possible to give HMG or HKG proper notice of the final move. They had planned to make the announcement on Tuesday 14 July, but movements in the share price before the weekend had made it essential to announce this morning.

3.

Sir Adrian thought that the Chinese decision to take a

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CONFIDENTIAL

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