HNA Financing Costs Outstrip Earnings and More Asia Real Estate Headlines

One of China’s biggest deal makers is back in the news today as HNA Group, reveals that its borrowing costs outstrip its earnings, at the same time that the hazily owned conglomerate sues a rogue Chinese businessman in New York. Also, in the news, Evergrande may be one of the mainland’s biggest debtors, but the company’s rising share price has made its chairman one of Asia’s richest men, and the mainland’s sovereign wealth fund is still shopping for deals down under. Read on for all these stories and more.

HNA Financing Costs Outstrip Profit After Deal Spree

HNA Group Co.’s financing costs more than doubled during the first half of the year, signaling the conglomerate’s $45-billion-plus acquisition spree since 2015 is catching up with the company.

The diversified group, which in recent years bought large stakes in companies such as Hilton Worldwide Holdings Inc. and Deutsche Bank AG, saw such expenses surge to 14.2 billion yuan ($2.2 billion) from 6.47 billion yuan a year earlier, according to its semiannual report released Wednesday. Based on Bloomberg calculations, earnings before interest and taxes were insufficient to cover those costs, a rarity for a company of HNA’s size – even in China. Read more>>

HNA Sues Guo Wengui in New York

One of China’s most acquisitive companies is suing an exiled Chinese businessman for allegedly spreading what it says are falsehoods that have hurt the conglomerate’s reputation and financial interests.

HNA Group Co., the airlines-to-hotels conglomerate that has been facing mounting scrutiny, alleges that real-estate tycoon Guo Wengui made “repeatedly false and defamatory statements” linking a high-ranking Chinese official in the Communist Party and his nephew to the company, according to a complaint filed Wednesday in New York state court. Read more>>

Evergrande Share Surge Makes Xu Asia’s 2^nd Richest Man

A $9 billion surge in the past seven days has made Chinese property tycoon Hui Ka Yan Asia’s second-richest person.

Hui, chairman of China Evergrande Group, has added more wealth than any person on the Bloomberg Billionaires Index this year, a 360.6 percent rise that’s added $26.7 billion to his fortune. The 59-year-old Hui, who has a net worth of $34.1 billion, surpassed India’s Mukesh Ambani to become Asia’s second-richest person as Evergrande shares jumped amid soaring property sales and the company’s shift to a low-debt strategy. Read more>>

Chinese Estates Boosts Stake in Evergrande

Shares of China Evergrande Group rose to a fresh all-time high on Wednesday as Chinese Estates Holdings, controlled by Hong Kong tycoon Joseph Lau Luen-hung’s wife Kimbie Chan Hoi-wan, continued to build a stake in the property giant.

An announcement by Chinese Estates on Monday night showed it had bought another 111 million shares in Evergrande between July 19 and August 29, making its total interest 5.83 per cent. It also said Chan personally held 35 million shares or 0.27 per cent of Evergrande, effectively making her Evergrande’s second-largest shareholder with a 6.1 per cent stake. Read more>>

China’s CIC Bids for Aussie Senior Living Portfolio

Funds giant China Investment Corporation has emerged as one of the candidates taking a closer look at Lendlease’s retirement villages portfolio.

The sovereign wealth behemoth is controlled by China’s State Council. With its privileged position investing state-owned capital, it so far remains unfettered by the government’s drive to rein in investment abroad by local entities. Read more>>

Fosun Intl Reports 33% Profit Jump

Conglomerate Fosun International (0656), one of China’s most acquisitive overseas deal-makers, reported a 33.6 percent rise in first-half net profit yesterday, thanks to steady growth in its core businesses.

The insurance-to-tourism firm, which has a market value of HK$106.3 billion, said net profit in the six months ended June totaled 5.86 billion yuan (HK$6.96 billion), up from 4.39 billion yuan a year earlier. Read more>>

Perennial, Yanlord Extend Offer for United Engineers

A consortium led by Singapore-listed property developers Perennial Real Estate Holdings and Yanlord Land Group have extended their takeover offer for United Engineers (UE) to September 12. The earlier deadline for the closing of offer was August 29.

As on August 28, Yanlord Perennial Investment had valid acceptances from 34.65 percent of UE’s common stockholders and 92.03 percent from UE’s preference shareholders, it said in a statement on Monday. Read more>>

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