SHANGHAI (AFP) -– China Southern Airlines, the nation's biggest carrier by fleet size, said Tuesday it plans to raise 10.75 billion yuan (1.6 billion dollars) to repay bank loans and replenish its capital.

The company will issue up to 1.77 billion yuan-denominated A-shares at a minimum price of 5.66 yuan each to 10 institutions including its parent in a private placement, it said in statements to the Shanghai Stock Exchange.
China Southern will also issue up to 312.5 million H-shares at a minimum of 2.73 Hong Kong dollars (35 US cents) to Nan Lung Holding Ltd, a subsidiary of its parent China Southern Air Holding Company, it said.
State-owned China Southern Air Holding Company and its Nan Lung Holdings unit will jointly subscribe to new shares worth at least 1.5 billion yuan -- the amount of aid China's finance ministry awarded the airline's parent.
China Southern said it would use the proceeds from the private placement to pay back bank loans totaling 4.8 billion yuan and 1.35 billion dollars.
The repayment is expected to lower its debt-to-assets ratio and cut its financing costs such as interest.