One of China’s largest conglomerates, HNA Group, on Friday announced bankruptcy and restructuring after a multi-year debt and liquidity crisis, according to the company’s announcement on Friday.
The company received notification from South China’s Hainan High People’s Court on Friday. “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.
HNA Group said it will cooperate with the court for judicial review, carry forward the debts disposal, and support the court’s protection of the legal rights of its creditors so as to ensure the smooth operation 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 on HNA Group also finished due diligence at the company and drew up risk disposal plans on the same day.
Gu Gang was elected as HNA Group’s new Party secretary on Tuesday after he resigned from the post of executive chairman of HNA Group on January 22.
Once an aggressive dealmaker that spent extravagantly to buy stakes in notable foreign assets including Hilton Worldwide Holdings and Deutsche Bank, HNA Group, 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 crises in tandem with the coronavirus pandemic which wreaked havoc on tourism and disrupted aviation sector, HNA has failed in dissolving risks thoroughly, hence it asked for help from the local government, according to the company’s statement.
The local government of South China’s 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.
In a statement on HNA’s official WeChat account on Monday, the company said that risk disposal work is gradually being carried out, but the “severity of risks” must be paid high attention to.
HNA Group owns more than 2,300 companies, Caixin reported.
As of June 2019, HNA Group’s total assets reached 980.62 billion yuan ($151.77 billion) with its gross liabilities hitting 706.73 billion yuan, financial news site eeo.com said.
On Thursday, head of China’s Securities Regulatory Commission Yi Huiman said to strictly supervise companies’ delisting and encourage them to expand multiple exiting methods such as expanding reforms, reorganizing the enterprise and taking the initiative to exit the market.
Yi said the regulatory body will strengthen day-to-day supervision on listed companies and intermediary organs in order to optimize the market ecology.
Photo: CFP
