China's HNA Group reports $29 billion jump in assets, bank loans soar

Hainan Meilan International Airport Co

01/09/2017 11:27

By Matthew Miller and Shu Zhang 
    BEIJING, Sept 1 (Reuters) - China's HNA Group Co reported a 
190.4 billion yuan ($28.99 billion) rise in total assets in the 
first half of 2017, following its acquisition of Ingram Micro 
Inc, Gategroup and CIT's aviation leasing business. 
    The sprawling aviation-to-financial services conglomerate 
also said in a semi-annual bond disclosure filing that it has 
used 454.5 billion yuan of its 745.2 billion yuan total credit 
line. 
    That compared with 369.1 billion yuan used from 611.4 
billion yuan in credit lines reported at the end of 2016. 
    Friday's filing provides a rare overview of the underlying 
financial situation of China's most active non-government player 
in global markets. 
    HNA has announced deals over the last two years of more than 
$50 billion, which includes taking sizable stakes in Hilton 
Worldwide Holdings Inc  HLT.N  and Deutsche Bank  DBKGn.DE .  
    The company also now faces increased scrutiny, as regulators 
and bankers question the group's opaque ownership structure and 
use of leverage.   
    HNA also is locked in a high stakes legal dispute with Guo 
Wengui, an exiled Chinese businessman, who has claimed that the 
group is tied to Communist Party officials and their family 
members. HNA rejects the accusation and in June filed a 
defamation lawsuit against Guo in New York.  urn:newsml:reuters.com:*:nL3N1JD1B2 
    In July, the company for the first time published a list of 
its shareholders, and announced the creation of a New York-based 
charity to hold 29.5 percent in the company.  urn:newsml:reuters.com:*:nL5N1KF28T 
    In Friday's filing, HNA said that its finance costs more 
than doubled to 14.19 billion yuan for the period, from 6.48 
billion yuan over the same period last year. The company reports 
7 active on-shore corporate bonds with 14.25 billion yuan 
outstanding. 
    Net profits for the group amounted to 812 million yuan for 
the first six months of the year, compared with 554 million yuan 
in the same period a year earlier. 
    The company said that operating income reached 265.1 billion 
yuan for the six-month period, compared with 48.5 billion yuan 
for the same period in 2016, as acquisitions began to make an 
impact.   
    HNA's operating costs also soared during the period to 231 
billion yuan, from 34.8 billion yuan the same period last year. 
    The group reported that its long-term borrowing reached 
291.5 billion yuan, an increase of 62.77 billion yuan over the 
start of the year. 
    Non-current liabilities due within one year, including 
bonds, loans and payables, inched up to 29.4 billion yuan, the 
filing said. 
    HNA Group CEO Adam Tan told Reuters in July that he 
continued to have a strong working relationship with Wall Street 
banks, including JPMorgan  JP.M  and Morgan Stanley  MS.N , and 
pushed back against reports that some were scaling back credit. 
 urn:newsml:reuters.com:*:nL3N1KF508 
 
($1 = 6.5670 Chinese yuan renminbi) 
 
 (Reporting by Matthew Miller and Shu Zhang) 
 ((matthew.miller1@thomsonreuters.com;)) 
 
Keywords: HNA REPORT/