Mingtiandi

Asia real estate and outbound investment news

  • Facebook
  • LinkedIn
  • RSS
  • Twitter
Sign Up / Login Logout

Lost your password?
Register
Forgotten Password
Cancel

Register For This Site

A password will be e-mailed to you.

  • Capital Markets
  • Events
    • Mingtiandi 2023 Event Calendar
    • Mingtiandi APAC Residential Forum 2023
    • Mingtiandi Asia Logistics Forum 2023
    • Mingtiandi Hong Kong Focus Forum 2023
    • Mingtiandi APAC Data Centre Forum 2023
    • Mingtiandi Asia Office Strategies Forum 2023
    • Mingtiandi Singapore Focus Forum 2023
    • More Events
  • MTD TV
  • People
  • Logistics
  • Data Centres
  • Asia Outbound
  • Retail
  • Research & Policy
  • Advertise

HNA Declares Bankruptcy, Begins Restructuring After Struggling to Pay Debts

2021/01/31 by Michael Cole Leave a Comment

HNA Leadership

HNA’s leadership met to begin restructuring the company late last week.

China’s HNA Group, once one of the country’s most prolific global investors, has been sued by its creditors for failure to pay debts and is entering bankruptcy, according to a series of recent statements by the parent company of Hainan Airlines.

In a notice on its corporate WeChat account on Friday, the company which was once paying above market rates for trophy buildings in London and New York, said that it had been informed by the high court in Hainan province, where it is based, that it had been sued by its creditors due to failure to pay overdue debts.

“Bankruptcy reorganization is an inevitable move for HNA to steadily promote risk resolution and to protect the company,” HNA party secretary Gu Gang said at a meeting of company staff on 29 January, as reported on the group’s WeChat on Saturday. Gu, a Hainan provincial government who joined HNA as executive chairman last year, added that the bankruptcy has been undertaken as part of a plan mapped out to maintain the company’s operations and support its workforce.

Gu reassured the company’s staff that HNA’s “debt, equity, and management will be reorganized and re-engineered in accordance with the principles of ‘rule of law, market forces, and operability’ to protect the interests of all parties as much as possible,” according to the company statement.

Non-Airline Assets to Be Liquidated

The set of announcements by HNA Group, comes after Gu and another Hainan official were named to top level positions in the company in March of last year as it struggled to follow through on a debt reduction plan which had been mandated by the central government since 2017.

gu gang HNA

Gu Gang was named party secretary of HNA as Chen Feng disappears

The company had indicated in a statement last week that a joint working group headed by Gu had settled on a debt reduction plan. That scheme includes HNA, which controls Hong Kong airlines and a host of other mainland carriers in addition to Hainan Airlines, selling off its non-airline assets, according to an account in Bloomberg.

The plan also appears to include removal of HNA founder, and until recently chairman, Chen Feng, whose name did not appear on a leadership roster published by HNA on 26 January. In September of last year Chen Feng, dubbed the Buddhist billionaire for his traditional Chinese costumes, had been placed on a debtor list which banned him from flying or staying in luxury hotels after HNA had failed to make payment on a debt.

In December HNA agreed to sell Ingram Micro to US fund manager Platinum Equity in a $7.2 billion deal. The group had purchased the electronics distributor at a $6 billion valuation in 2016, but last May failed to make a $750 million payment on a $4 billion loan used to finance the acquisition.

In November 2019 HNA had sold its last London asset, 17 Columbus Courtyard on Canary Wharf, for £100 million (then $129 million), after having purchased the office block for £131 million in 2016. During that same month, the group also sold a set of US golf courses at a 24 percent markdown from what it had paid to acquire them, with other assets also being liquidated at discounts.

In April 2019 CWT International, a Hong Kong-listed subsidiary of HNA Group, revealed that creditors had seized its assets in Singapore, China and the US, after the company defaulted on a short-term loan.

Pay-Back Time

Now bankrupt, HNA is fully in the hands of regulators and banks, who can be expected to ruthlessly reorganize the company,” said Brock Silvers, chief investment officer at real estate fund manager Kaiyuan Capital. “Some HNA business lines have value and will likely survive, but the company as a whole may now be just as dependent upon politics as economics.”

In a shopping spree that reached its peak with a $30 billion surge of acquisitions from January 2016 through mid-2017, apart from its real estate deals, HNA acquired a 15 percent stake in Deutsche Bank and a 25 percent share of Hilton Hotels Group, as well as buying Minnesota’s Carlson Hotels. Most of these holdings have since been disposed of entirely or in part.

In June 2017 China’s primary banking regulator instructed some of the country’s biggest banks to scrutinise lending to HNA, as well as to Wang Jianlin’s Dalian Wanda and Guo Guangchang’s Fosun Group as the government grew concerned over debt levels and outflows of foreign exchange.

One month later, Bank of America Merrill Lynch told its team to stop working on transactions with HNA Group, after Citigroup and Morgan Stanley had already taken similar steps.

In late July 2017 HNA further worried creditors when it said that its largest shareholder, Guan Jun, a 30-something Beijinger, recently gave his 29 percent stake in the company – then worth around $18 billion – to a charity. The company’s then CEO Adam Tan, subsequently told the Financial Times that Guan and another shareholder had never been the beneficial owners of their shares, “but had just held the stake for us.”

Share this now

  • LinkedIn
  • Share
  • Tweet
  • Email

Filed Under: Finance Tagged With: Bankruptcy, daily-sp, Featured, HNA Group, weekly-sp

Leave a Reply

Your email address will not be published. Required fields are marked *

Get Mingtiandi Delivered

MTD TV

Princeton Digital Sees APAC Network Expand with Hyperscaler Demand: MTD TV
mtd tv sustainable data centres
Efficiency, Design and Green Power Key to Data Centre Sustainability: MTD TV

More MTD TV Videos>>

People in the News

Nicholas Toh, group chief executive officer of DCI Data Centers
Nicholas Toh Takes Over as Group CEO at DCI Data Centers
Charles Griffith Macquarie
Asia Real Estate People in the News 2022-02-06
Kelvin Chan CBRE
CBRE Hires Kelvin Chan as Head of Capital Markets for China
Yoshinaga Takahashi PDG
PDG Hires Mitsui’s Yoshinaga Takahashi as Managing Director of Japan

More Industry Professionals>>

People in the News

Nicholas Toh Takes Over as Group CEO at DCI Data Centers

Nicholas Toh, group chief executive officer of DCI Data Centers

DCI Data Centers, an arm of Brookfield Infrastructure, has tapped Nicholas Toh to serve as group chief executive … Read More>>

Asia Real Estate People in the News 2022-02-06

Charles Griffith Macquarie

Finance giants lead this week’s collection of personnel moves on Mingtiandi as two of Asia Pacific’s largest financial … Read More>>

CBRE Hires Kelvin Chan as Head of Capital Markets for China

Kelvin Chan CBRE

CBRE on Friday announced the appointment of Kelvin Chan as the global property consultancy’s head of capital markets for … Read More>>

PDG Hires Mitsui’s Yoshinaga Takahashi as Managing Director of Japan

Yoshinaga Takahashi PDG

Princeton Digital Group has appointed Yoshinaga Takahashi as managing director of Japan, where he will help execute the … Read More>>

More Industry Professionals>>

Latest Stories

Haian Wanda Plaza (Getty Images)
Investors Snap Up $500M in Dalian Wanda Bonds and More Asia Real Estate Headlines
Raymond Lawler_Hines Asia-Pacific CEO
Hines to Build $1B Mixed-Use Complex in South Korea’s Busan
Nicholas Toh, group chief executive officer of DCI Data Centers
Nicholas Toh Takes Over as Group CEO at DCI Data Centers

Sponsored Features

How Data Leadership Can Prepare Real Estate Companies for Big Data and AI in 2023
OpenSpace Capture
OpenSpace Capture Provides On-the-Ground Eyes at US Government Building Projects
Malls and Megaprojects from Hong Kong to Beijing Triumph at PropertyGuru Awards Show

More Sponsored Features>>

Connect with Mingtiandi

  • Facebook
  • LinkedIn
  • RSS
  • Twitter

Real Estate News

  • Capital Markets
  • 2022 Event Calendar
  • MTD TV Archives
  • People
  • Logistics
  • Data Centres
  • Asia Outbound
  • Retail

More Mingtiandi

  • About Mingtiandi
  • Contact Mingtiandi
  • Mingtiandi Membership
  • Newsletter Subscription
  • Advertise
  • Terms of Use
  • Privacy
  • Join the Mingtiandi Team


© 2007-2023 China Advertising Media Ltd (Samoa). All rights reserved.

  • This field is for validation purposes and should be left unchanged.