HNA explores sale of newly acquired CWT logistics unit -sources (updated)

CWT International

19/09/2018 08:37

* HNA completed acquisition of CWT in December last year
    * Potential sale to be latest in string of recent HNA
divestments 

 (Adds details on CWT operations, recent HNA asset sales)
    HONG KONG, Sept 19 (Reuters) - China's HNA Group  HNAIRC.UL 
is in talks with banks to find a buyer for its CWT logistics
unit, nine months after it acquired the Singaporean business in
a $1 billion deal, several people familiar with the matter told
Reuters.
    The sale, if completed, would be the latest in a series of
divestments aimed at slashing debt at the aviation-to-financial
services conglomerate. HNA has attracted much scrutiny for its
$50 billion worth of deals in recent years that included hotels
in the United States and a stake in Deutsche Bank  DBKGn.DE .
    For CWT, HNA is targeting a non-Chinese buyer, three sources
said. Another person said only a part of CWT would be put up for
sale. The sources declined to be named as HNA's talks with
investment banks for a buyer were confidential.
    An HNA spokeswoman declined to comment.
    The group completed the acquisition of Singapore-based CWT
in December last year via a wholly owned subsidiary - HNA Belt
and Road Investments Singapore.  urn:newsml:reuters.com:*:nL3N1OB3FZ
    The CWT business, spread across 90 countries, was folded
into one of HNA's listed units in Hong Kong that was renamed CWT
International Ltd  0521.HK .
    Besides logistics, CWT operates a commodity marketing
business and also provides engineering services primarily in
Singapore through a subsidiary.
    "Some parties are conducting due diligence on CWT," said one
of the sources.
    In July, the Hong Kong-listed CWT International said it had 
entered into a pact to sell and lease back five warehouse
properties in Singapore for S$730 million ($533 million).
    CWT International also said in its interim results that it
had "certain borrowings", raised to fund the purchase of
Singapore's CWT, due this month that it would be unable to repay
unless it was able to get "sufficient cash sources" through
refinancing.
        
    ASSET DIVESTMENT
    Recent asset sales by HNA, which counts Hainan Airlines Co
 600221.SS  as its core business, include holdings in companies
such as Hilton Worldwide Holdings Inc  HLT.N , Park Hotels &
Resorts  PK.N  and Spain's NH Hotels  NHH.MC .
    In August, Japan's Orix Corp  8591.T  struck a $2.2 billion
deal to buy a 30 percent stake in HNA's aircraft leasing
business Avolon Holdings, the world's No. 3 lessor.  urn:newsml:reuters.com:*:nL4N1UZ3BN
    HNA is also open to sell its stakes in Deutsche Bank, Virgin
Australia Holdings  VAH.AX  and shipping container leasing
company SeaCo, which it acquired in 2011 for $1 billion,
according to separate sources.
    The HNA spokeswoman declined to comment on this.
    Assets not related to HNA's core aviation business are being
sold, several people close to the group have told Reuters.  
    The conglomerate's total debt stood at $96 billion at the
end of the first half of 2018. While this was 10.7 percent below
end-2017 levels, its total debt to EBITDA was still 21.36 times
by the end of June.  urn:newsml:reuters.com:*:nL3N1VN02V
 ($1 = 1.3690 Singapore dollars)
 ($1 = 6.8537 Chinese yuan)

 (Reporting by Kane Wu, Julie Zhu, Sumeet Chatterjee in HONG
KONG, and Anshuman Daga in SINGAPORE; Editing by Himani Sarkar)
 ((kane.wu@thomsonreuters.com; +85228436590; Reuters Messaging:
kane.wu.thomsonreuters.com@reuters.net))