Another piece fell into place for Air Canada in its effort to emerge from bankruptcy protection by the end of September: a pledge by US private equity firm Cerberus Capital Management to invest $183 million. The sum will bring the amount of new cash raised by the airline to $803 million ($1.1 billion Canadian). The refinancing, together with a new business model and givebacks by unionized employees and still other cost cuts, must be approved by the courts and by Canada's finance minister, but those are considered certain. Cerberus failed last year to outbid Hong Kong's Trinity Time Investments to become Air Canada's partner. Trinity Time, however, walked away from its deal in early April, blaming the refusal of labor unions representing the carrier's employees to agree to deep cost-cutting measures. Cerberus is based in New York.
The Bank of Communications, the fifth-largest lender in China, agreed to sell just under a 20 percent stake to financial services giant HSBC Holdings PLC, reports said. Terms were not announced and neither party would comment, but state-controlled news media in China valued the deal at $1 billion. The investment is believed to be the largest yet in a local bank by a foreign investor. A 20 percent stake, however, is the maximum allowable, and each deal must be approved by government regulators. China plans to open its restrictive banking sector to foreign competition in 2007. HSBC is based in London.