China's HNA Group says creditors want it declared bankrupt
HNA Group, a debt-burdened Chinese airline operator that faced opposition in Washington to its attempt to buy a Wall Street hedge fund during a costly global acquisition spree, says its creditors have asked a court to declare the company bankrupt
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Your support makes all the difference.HNA Group, a debt-burdened Chinese airline operator that faced opposition in Washington to its attempt to buy a Wall Street hedge fund during a costly global acquisition spree, says its creditors have asked a court to declare the company bankrupt.
HNA said on its social media account it would cooperate with the court and “actively promote debt disposal.” It said creditors asked “for bankruptcy and reorganization of our group because the group cannot repay their debts.” It gave no details of the company’s status and no indication whether the court agreed to the petition.
Spokespeople for HNA, headquartered in Haikou on the southern island province of Hainan, didn’t respond to requests for more information.
HNA began as a one-plane airline in 1993. It was struggling with $75 billion in debt when last year’s shutdown of global travel to fight the coronavirus pandemic devastated its core aviation business.
HNA Group was among many Chinese companies that went on a global shopping spree starting in 2014. Financed by state banks, bond sales and their own rising revenues, they bought hotels, insurance companies, sports teams and other assets.
The company attracted attention in Washington in 2017 when it agreed to buy a hedge fund from Anthony Scaramucci, who was due to take a White House post as then-President Donald Trump’s liaison to Wall Street.
That prompted questions about whether someone so close to Trump should be involved in a transaction with a Chinese company at a time of tension between Beijing and Washington. The sale never received regulatory approval and the two sides called off the deal in 2018.
HNA Group also bought stakes in Deutsche Bank AG and hotel operator Hilton Worldwide Holdings Inc.
Regulators clamped down in 2016, tightening control on financing and approval of foreign acquisitions. By then, HNA and some other companies had run up debts some were struggling to repay.
The Hainan provincial government took control of the floundering company last February.
HNA said on Jan. 23 it was carrying out a “risk disposal plan.”
The company’s co-founder, Chen Jian, a member of the ruling Communist Party, was removed as head of a party committee at the company this week, according to the business magazine Caixin.
Another co-founder, Chen’s then-co-chairman Wang Jian, died in 2018 in a fall while on vacation in France.