HNA Group has entered bankruptcy by bondholders and creditors after debt restructuring fails

by Michael Cheng
The Hainan Airlines Group (HNA), one of China’s largest asset investors with the solid background of a privately-owned airline, has been entered into bankruptcy. The move comes after a government-led exercise to work out its debts failed to come up with money to repay bondholders and creditors, according to a statement on its WeChat account.  The company was served with a petition on 29 January in the provincial High Court seeking its bankruptcy and for it to undergo a restructure.
The company management mentioned that HNA will push forward with the debt restructure and cooperate with the court’s review to protect the legitimate rights and interests of creditors.
Some of HNA Group's brands

Some of HNA Group’s brands

About the HNA Group

HNA Group, established in 1993 by Chen Feng (a civil aviation authority veteran)successfully ballooned into one of the biggest private owned airlines in 2017. From operating four aircraft to enhance transportation between mainland China and Hainan island where the company is based. Fuelled by bank loans and armed with money earned from its business, HNA Group started investing in stakes and branded assets. These included shopping retailers, Hilton Hotels, malls, resorts, and banks including Deutsche Bank.

HNA Group had at least 1 trillion yuan (US$154.8 billion) of assets in it’s financial year ending 2017, driven by Chen’s ambition for his conglomerate. This made it onto the Fortune 100 list of the world’s largest companies by assets.

The Start of Demise…

A Hainan Airlines Airbus A350-1000

A Hainan Airlines Airbus A350-1000

The speed actions came to end in early-2018, when China’s financial regulators cracked down on the debt-fed binge for protecting the banking industry.  A working group, including government officials representing the aviation regulator and provincial authorities, was established for restructuring HNA Group’s debts later in February 2020. The company also owns Hong Kong Airlines, one of their HK based carriers. HNA Group’s stake in Hong Kong Airlines is up for grabs, as Air China and other parties are in talks to seize control of the carrier.

We will bring the latest news on this insolvency and restructuring plan as we receive it. Let us know your thoughts below.

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