HNA Group to sell overseas property, divest non-core assets

Source:Reuters Published: 2017/12/6 21:18:40

HNA Group Co CEO Tan Xiangdong said the firm is negotiating the sale of overseas real estate as part of a strategic streamlining, the 21st Century Business Herald reported on Wednesday.

HNA may also set up investment funds to help sell the properties in New York, Sydney and Hong Kong to outside investors, Tan said.

"HNA is a rational investor," Tan told the newspaper, and it will sell and not just buy assets.

HNA has "cleared" more than 100 small companies this year that weren't key to its core business, Tan said, and it has slowed the pace of outbound investment since last November.

Tan's remarks came as HNA, which signed deals of $50 billion over two years, including stakes in Hilton Worldwide Holdings Inc and Deutsche Bank AG, faces increased scrutiny from regulators and bankers due to announced changes to its shareholding structure and its use of leverage.

Last week, S&P Global Ratings downgraded HNA's credit profile by one notch to 'b', five notches below investment grade, citing the group's "aggressive financial policy" and tightening liquidity amid looming debt maturities.

HNA's financing woes continued this week, with a report that airlines owned by the Chinese conglomerate have missed some payments due on leased aircraft, Fred Browne, CEO of aviation lessor Aergo Capital, told industry publication FlightGlobal.

Tan told the 21st Century Business Herald that HNA's access to credit remains sound. Domestic banks had combined credit lines of more than 800 billion yuan ($121 billion) with HNA as of the end of November, Tan said, and nearly 300 billion yuan of those credit lines were unused.

The company in a separate filing earlier this year said that it had used 454.5 billion yuan of its 745.2 billion yuan total credit lines as of the end of June.

Last month, HNA announced that Shanxi Rural Credit Cooperative gave it a credit line of 10 billion yuan, mainly to support financing of the aviation sector in Shanxi Province.

HNA faces regulatory investigations in Europe following the July announcement by the conglomerate that named key executives as shareholders.

The Swiss Takeover Board said last month HNA gave partially untrue or incomplete information during the takeover of Swiss airline catering firm Gategroup, which the conglomerate bought for $1.5 billion last year.

The regulator said the group had failed to disclose that company executives held controlling stakes in the conglomerate.



Posted in: COMPANIES

blog comments powered by Disqus