HNA Confirms Fire Sale List of $1.1B More in Mainland China Assets

Financially troubled mainland conglomerate HNA Group has now disclosed that it is seeking to unload a set of domestic assets worth RMB 7.6 billion ($1.1 billion), according to local media reports citing public statements by officials representing the parent company of Hainan Airlines.

On Friday, HNA officials announced at a conference that the company is selling 10 mainland China assets, including an office complex, a number of hotels, a retail centre, development projects and stakes in unlisted companies, according to a report in local news site CB.com.

The massive disposals came after the troubled group in early October put on the market a list of 82 properties said to be worth a total of $11 billion. As the properties included in the earlier 82 item list were never made public, it remains unclear if the set of assets announced on Friday are in addition to the earlier list.

Resorts, Amusement Parks and Liquor Makers All Available

The 10 properties put up for sale by HNA Group include Beijing Haiyu Square — an office complex in the capital — and the Changchun Saide Shopping Centre in northeastern China. HNA is also offering to interested buyers a set of projects in its home province of Hainan, including a Sheraton resort in Sanya, the HNA New World Hotel in Danzhou and two phases of the still under-construction Baoting Guest House in Hainan. In eastern China’s Jiangsu province, the company has made available a 90 percent stake in the Changsha Royal Seal Hotel.

Alongside all of the property, HNA is also inviting offers on equity stakes in three non-real estate businesses, including a 3.33 percent stake in Baoting Rongxing Bank, a 60 percent holding in Guizhou HNA Huaijiu Liquor Group, and a 100 percent stake in third-party payment platform HNA Pay.

At an asking price of RMB 2.65 billion, Haiyu Square, a commercial complex located next to the Happy Valley Scenic Area in Chaoyang District in Beijing is the priciest asset among the 10 new items on the for-sale list. The development includes a 19-storey office tower, three 15-storey serviced apartment buildings, a 20-storey five-star hotel, two five-storey retail towers — which contain a 15,000 square metre (161,458 square foot) underground supermarket — and the 50,000 square metre Haiyu Amusement Park. The total construction area of the Haiyu Square complex is around 200,000 square metres.

Shedding a Debt Burden

HNA has made the properties available as it tries to shed a debt burden estimated earlier this year at RMB 600 billion. In November, the company announced that it was renaming its property division, HNA Real Estate Holdings, as HNA Airport Development after the unit had already shed nearly RMB 4 billion ($580 million) in real estate assets, in a retreat from the property business. Following the name change, the company say that the repositioned entity will focus on developing airports and other infrastructure.

Included in HNA’s October list of 82 properties were nine overseas assets, including the Reuters headquarters building in London and a resort in Tahiti. In August this year, the company sold the site of its original headquarters, Wang Hai Technology Plaza in Haikou, to Tianjin-based developer Sunac China for RMB 981 million.

Asset Restructuring in Hainan

Apart from the asset-selling campaign, the Hainan-based group is also looking to restructure its assets in its hometown. To that end, HNA’s Shanghai-listed subsidiary, HNA Infrastructure Investment Group, has announced it is selling its affiliated commercial management company to CCOOP Group, a Shenzhen-listed department store company, for RMB 1.89 billion.

In return, CCOOP Group will hand over its Hunan-based logistics affiliate to HNA Group for RMB 570 million. HNA Infrastructure said the disposal and purchase, will bring the company RMB 660 million in cash, which will go toward the company’s ongoing restructuring.

HNA Group chairman Chen Feng said in an interview with Caijing in October that HNA had sold nearly RMB 300 billion in assets since the beginning of this year, adding that the company was planning to sell many more assets. HNA is also the majority owner of Caijing, although it was not known if it was also trying to unload the independent media group.