Editorial Summary

China Eastern Airlines' (600115.SH; 0670.HK; NYSE: CEA) minority shareholders rejected a US$920 million proposal from Singapore Airlines Ltd (SIA) and SIA's largest shareholder Temasek Holdings' for a 24 percent stake in China Eastern at a China Eastern Airlines shareholder meeting on Tuesday, reports Sina. Seventy-seven percent of the company's minority investors rejected the deal, while approval from two-thirds of minority investors was needed for the deal to go through. China National Aviation Holding Company, the parent company of China Eastern rival Air China (601111.SH; 0753.HK), holds a 12.07 percent stake China Eastern Airlines. Air China may propose an alternate solution for China Eastern Airlines, said the Sina report. China National Aviation said on January 6 that it would make a bid for a stake in China Eastern Airlines and that it would submit a proposal to China Eastern's board within two weeks outlining plans to form a strategic alliance between China Eastern Airlines and Air China.

Shares of Air China dropped 2.18 percent to close at 28.26 Yuan on Tuesday on the Shanghai Stock Exchange.