The Cathay Pacific Group has signed a non-binding memorandum of understanding with the DHL Group to purchase its minority interest in AHK Air Hong Kong Limited, becoming the sole shareholder of the cargo airline, according to a Hong Kong stock exchange filing.

The transaction is expected to take effect from January 1, 2019.

Air Hong Kong is currently 60% owned by Cathay and 40% owned by DHL.

As part of the MoU, Air Hong Kong will sell eight Airbus A300-600F aircraft to DHL and DHL will lease them back to AHK.

The two companies will also enter into a new block space agreement, under which AHK will sell space to DHL on an agreed freighter network of overnight Asian routes for an initial term of 15 years.

Cathay and DHL established their joint venture in AHK in October 2002, and signed a block space agreement in March 2007.

Air Hong Kong operates a fleet of 10 A300 freighters and three Boeing 747-400 freighters.