Pan American Holdings to Invest Up to $100 Million in Newly Established Grand China Airlines; Letter of Intent Signed in Haikou, China, on April 1, 2006

NEW YORK--()--April 5, 2006--Pan American Holdings, a Cayman Islands-based aircraft investment vehicle, completed its signing protocol in a Letter of Intent (LOI) with Hainan Airlines to invest between $60 million and $100 million, the equivalent of an 11 to 18 percent stake in the airline's new parent company Grand China Airlines (GCA). This protocol included agreement for a down payment and is pending approval of the Ministry of Commerce in Beijing.

If the LOI is approved by the Government, Pan American Holdings will become at least the second largest foreign investor in the new Chinese airline. The largest single investor currently is American Aviation LDC, a George Soros-owned investment vehicle. Bharat Bhise, Director of Pan American Holdings, indicated that full payment of the purchase would be complete by the end of 2006.

According to Hainan Chairman & CEO, Chen Feng, the decision to sell a percentage of Grand China Airlines enables Hainan to better its balance sheet and, in time, to raise funding for its planned listing on the Hong Kong stock exchange.

Grand China Airlines, owner of Hainan Airlines, will also own Hainan's other subsidiaries: Xinhua Airlines, Changan Airlines and Shanxi Airlines. Another pending acquisition is CR Airways, a Hong Kong-based carrier which will likely be part of GCA. Hainan Airlines is based in Haikou, Hainan, People's Republic of China. It is publicly traded on the Shanghai Stock exchange and has Chinese "A" shares and foreign "B" shares, as well as Hong Kong "H" shares. It is the largest non-government airline in China, and the fourth largest airline of China, including the big three Government airlines China Eastern, China Southern and Air China. Hainan operates a scheduled domestic services network with a fleet of 115 aircraft that includes Boeing 737 and 767 variants, as well as Airbus A319-100 and Boeing 777 and 787 aircraft on order. International flights were launched in 2005.

A former director of Hainan Airlines and now a senior advisor to top management, Mr. Bhise is the CEO of Bravia Capital Partners in New York. In 1995, Mr. Bhise led the effort for the Soros investment vehicle to purchase a stake in Hainan Airlines, which positioned Mr. Soros as the largest investor in the airline at 25 percent. After subsequent share offerings, the Soros-controlled percentage was reduced to 14.8 percent. This transaction was completed within Mr. Bhise's role as President of C-S Aviation, at that time.

About Bravia Capital

Bravia Capital Partners is a global finance and leasing company that provides commercial transport aircraft to airlines, typically with the advantage of retained equity ownership of the aircraft. Bravia Capital specializes in the distinctive aviation requirements of India, China and Eastern Europe. It has completed numerous transactions for B737, B767, DO328 and A319 aircraft for and with Hainan Airlines. Offices are located in New York, San Francisco, London and New Delhi. For more information, visit www.braviacapital.com

Contacts

For Pan American Holdings
Carolyn L. Smith, 626-744-0711
carolyn@magnusco.com

Contacts

For Pan American Holdings
Carolyn L. Smith, 626-744-0711
carolyn@magnusco.com