Lufthansa's Jade Cargo Nears Restructure Deal

February 29, 2012

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The owners of Jade Cargo, Lufthansa Cargo's joint venture in China, plan to team up with Chinese company UniTop to restructure the stricken cargo carrier.

Jade Cargo said its owners had signed a letter of intent covering the deal with Shenzhen-based UniTop, which it described as a fast-growing logistics and transportation company that aimed to strengthen its position in the international air cargo market.

"With this step, the restructuring of Jade Cargo has taken a positive step forward, benefiting all stakeholders," Jade Cargo said on Wednesday, adding further information would be provided in the short term.

Lufthansa Cargo has said it was reviewing its business in China, the world's second-biggest economy, where cargo companies are struggling to make a profit.

Lufthansa Cargo holds 25 percent of Jade Cargo, Shenzhen Airlines owns 51 percent, and 24 percent is held by German development bank DEG. Jade Cargo does not publish details on the annual volume of freight it carries.

Jade Cargo flights were suspended last month as its owners held talks on its financing, and Lufthansa Cargo chief executive Karl Ulrich Garnadt said in December the company was in constructive talks with the Bank of China and Shenzhen Airlines to agree a capital increase for Jade.