HNA Group was once one of China’s largest conglomerates, spending billions of dollars to expand its reach around the world. Now it could go bankrupt.
HNA Group had at least 1 trillion yuan (US$154.8 billion) of assets as recently as 2017, with at least 500 billion yuan of debt.
HNA Group enters bankruptcy restructuring after a government-led exercise to work out its debt failed to come up with enough money to repay bondholders and creditors.
In the evening of January 29, big news came from HNA Group: HNA filed for bankruptcy reorganization. According to public information, HNA involves a number of A-stock/HK stock listed companies, including HNA Investment, Guilin Tourism, Bohai Leasing, Supply and Marketing Grand Collection, HNA Innovation, Haiyue Energy, HNA Foundation, HNA Technology, HNA Holdings, Meilan Airports, etc. At present, HNA Group has been listed as an executee by several courts, and the total amount executed exceeds RMB1.3 trillion yuan.
The company, based in the Hainan provincial capital of Haikou, was served with a petition on January 29 in the provincial High Court seeking its bankruptcy and for it to undergo restructuring, HNA Group said in a statement on its WeChat account.
Besides land, HNA Group also owns Hong Kong Airlines, one of four carriers that used to be based in the city. HNA Group’s stake in Hong Kong Airlines is up for grabs, as Air China and other parties are in talks to seize control of the carrier, people familiar with the matter said last year.
HNA has sold all its overseas as well as non-core businesses in the past two years. The future business of HNA is destined to return to the aviation industry. But due to the impact of the epidemic, the airline industry has been hit. HNA relies closely on aviation profits in the future. It is estimated that it will take more than 100 years to earn profits to pay off all its debts.
Data from the Civil Aviation Administration shows that as of November last year, China’s civil aviation passenger traffic dropped 38.2% year-on-year, with domestic and international passenger traffic down 32.1% and 86.1% respectively.
Edited by staff
Source: G-news/CNN/SCMP/HNA Group