The Cathay Group announced that it has fully repaid the government of the Hong Kong Special Autonomous Region (HKSAR) for its HK19.5 billion investment.

The company also bought back the remaining 50 percent of preference shares previously issued to the HKSAR government during its recapitalisation in 2020. The said shares are worth HK$9.5 billion.

The Cathay Group bought back the initial 50 percent of those preference shares in December of last year. 

All remaining preference dividends have also been fully paid up to 31 July 2024, bringing the total of dividends paid to the government throughout the holding period to HK$2.44 billion.

Cathay Group CEO Ronald Lam sees the repayment as a significant milestone in the company’s ongoing journey to rebuild itself.

Lam said: “[We have] been progressing well and this has enabled us to fully redeem the preference shares only 18 months after Hong Kong reopened. We are extremely grateful for the support and guidance that the HKSAR Government, its two observers on the Board, and all of our shareholders have shown Cathay, both during and since the pandemic.”

The company’s overall HK$39 billion recapitalisation financing in 2020 comprised three tranches:the issuance of HK$19.5 billion preference shares with warrants to the HKSAR Government; an HK$11.7 billion rights issue of ordinary shares to existing shareholders; and an HK$7.8 billion bridge loan facility provided by the HKSAR Government, which was not utilised and expired on 8 June 2023.

In addition to buying back the preference shares and paying preference share dividends to the HKSAR Government, the Cathay Group made its first dividend payment to ordinary shareholders since 2019 in May of this year, totalling HK$2.8 billion.