Debt-laden HNA drops A$280m Australia logistics deal

SYDNEY: China’s debt-saddled HNA Group Co Ltd cancelled its A$280 million (RM836.28 million) purchase of an Australian logistics business yesterday, with the seller citing cash flow problems at the conglomerate among reasons for the deal’s collapse.

HNA’s unsolicited offer for Automotive Holdings Group (AHG) Ltd’s refrigerated trucking arm landed last November, at the tail end of the firm’s US$50 billion (RM202 billion) two-year acquisition spree and just as concerns about its financing costs began to surface.

The unwinding of the offer, which included HNA assuming an additional A$120 million in debt on top of the purchase price, comes as those worries have intensified and as HNA has been offloading global assets to settle its debts.

“Unfortunately... HNA has run into liquidity problems which, combined with the delayed Foreign Investment Review Board (FIRB) process, left the conditions precedent unable to be satisfied,” said AHG managing director John McConnell.

Last week, AHG had said it was still in talks with HNA, including discussing an HNA request for funding support, but McConnell said yesterday those talks had ended.

AHG’s shares slumped 10 per cent to a six-year low, while the broader market rose.

The firm is unloading assets and shareholdings — having agreed to sell US$10 billion in real estate this year, along with stakes in Deutsche Bank AG and Hilton Worldwide Holdings Inc.