EVA Airways Corp, Taiwan's second-biggest carrier, agreed to invest 328 million yuan ($49 million) in China Eastern Airlines Corp's cargo unit as its mainland partner restructures freight operations following a takeover.

EVA will get a 16 percent stake in China Cargo Airlines following the deal and it will also quit a venture with Shanghai Airlines Co, the Taoyuan, Taiwan-based carrier said in a stock exchange statement Wednesday. China Cargo plans to raise a total 2.05 billion yuan, according to the statement.

The deal paves the way for China Eastern to combine three cargo carriers following its takeover of Shanghai Air in January. The Shanghai-based carrier expects to reach agreements with other venture partners, which include Singapore Airlines Ltd's cargo unit, this month, Board Secretary Luo Zhuping said December 6.

The EVA Air deal is part of the restructuring, Luo said Wednesday, declining to elaborate further on the progress of the plan. The carrier intends to combine the operations of China Cargo, Shanghai Air's freight business and of Great Wall Airlines Co. EVA owned 25 percent of the Shanghai Air freight venture.

China Eastern was due to receive its parent's 51 percent stake in Great Wall this year, Chairman Liu Shaoyong said in March.

Singapore Air's cargo unit owns 25 percent of Great Wall, while Temasek Holdings Pte, a Singapore state-owned investment company, holds the rest. China Eastern is already managing operations.

Bloomberg

(HK Edition 12/16/2010 page3)