HNA Group declares bankruptcy, seeks restructuring amid debt crisis
One of China’s largest conglomerates, HNA Group, on Friday declared bankruptcy and restructuring after a multiyear debt and liquidity crisis.
The company was informed by South China’s Hainan High People’s Court on Friday that “because the company is unable to pay off its debts, related creditors appealed to the court for the company’s bankruptcy and restructuring,” read the announcement of the company.
HNA Group said it will cooperate with the court for judicial review, carry forward the debt disposal, and support the court’s protection of the legal rights of its creditors so as to ensure the smooth operations of the company.
The move came after the change of the company’s top executives on January 22.
A Hainan provincial government-led working group also finished due diligence at the company and drew up risk disposal plans the same day.
Once an aggressive dealmaker that spent extravagantly to buy stakes in notable foreign assets like Hilton Worldwide Holdings and Deutsche Bank, HNA Group, the owner of Hainan Airlines, started to save itself by selling some of its assets after a liquidity crisis gripped the company in 2017, focusing on its airline and tourism businesses, media reports said.
After years of debt and liquidity together with the coronavirus pandemic which plagued tourism and disrupted the aviation sector, HNA failed to deal with risks thoroughly. It then sought the help of the local government, according to the company.
The local government of Hainan Province last year stepped in and established a working group with other agencies to help solve HNA’s financial woes, the company said in February 2020.
The company said on Monday that risk disposal work is gradually being carried out, but the “severity of risks” must be given high attention.
Official data showed that HNA Group ranked the fourth in terms of transport capacity in China in 2019.