China’s HNA Group seeks up to US$1.5 bln in new fund

Aunit of debt-laden Chinese conglomerate HNA Group is seeking to raise as much as US$1.5 billion by the end of this year in an investment fund that will serve as the group’s primary vehicle for global acquisitions, a document reviewed by Reuters showed.

The Overseas Aviation and Tourism Industry Fund will target travel, aviation and real estate assets around the world, according to the document.

HNA Aviation and Tourism Group is the division of the company that is behind the fund, the document showed.

The fund raising comes as the Chinese conglomerate is unloading assets and partnering with other companies as part of a wider reorganization, sparked by mounting debts levels after announcing more than US$50 billion worth of global M&A deals over 2016 and 2017.

The group has traditionally made direct acquisitions, and that strategy has resulted in higher debt.

HNA also has been pushed back by regulators in several countries, concerned about its murky ownership structure.

Capital control restrictions placed by Chinese regulators in recent years have also been weighing on HNA’s deal activity.

The company has started to raise external capital for the fund this month, according to the document. — Reuters