China to take over HNA as coronavirus hits business - Bloomberg (updated)
19/02/2020 16:40
(Updates with details)
BEIJING/SHANGHAI, Feb 19 (Reuters) - China plans to take
over HNA Group Co and sell off its airline assets, as the
coronavirus outbreak has hit the Chinese conglomerate's ability
to meet financial obligations, Bloomberg reported https://www.bloomberg.com/news/articles/2020-02-19/china-said-to-near-takeover-of-hna-group-as-virus-hits-business?utm_content=business&utm_campaign=socialflow-organic&utm_medium=social&utm_source=twitter&cmpid=socialflow-twitter-business
on Wednesday, citing people familiar with the matter.
The government of Hainan, the southern province where HNA is
based, is in talks to take control of the conglomerate, the
report said. HNA directly controls or holds stakes in a number
of local carriers, including its flagship Hainan Airlines
600221.SS .
HNA did not immediately respond to requests for comment on
the Bloomberg report.
HNA Group was once one of China's most aggressive dealmaking
firms, spending $50 billion to build an empire that once spread
from Deutsche Bank DBKGn.DE to Hilton Worldwide HLT.N .
It began unwinding those bets two years ago to shift the
focus to its core airlines and tourism businesses, after drawing
scrutiny from Beijing and other overseas regulators.
In December, its chairman Chen Feng said that the firm had
faced cash flow shortages that forced it to delay some salary
payments in 2019, but vowed to resolve its liquidity risks this
year. urn:newsml:reuters.com:*:nL4N29515F
The company has in recent weeks come under pressure from the
new coronavirus outbreak in China which has forced airlines to
cancel thousands of flights.
Hainan Airlines and other airlines have tried to cut their
losses by putting foreign pilots on unpaid leave, Reuters
reported on Tuesday. Hong Kong Airlines, also part-owned by HNA,
said on Friday that it will cut 400 jobs.
urn:newsml:reuters.com:*:nL4N2A60YP urn:newsml:reuters.com:*:nL4N2A7248
China's aviation regulator acknowledged the industry's pains
last week, and said it would support restructurings or mergers
to help airlines cope with the epidemic. urn:newsml:reuters.com:*:nL4N2AC10Q
(Reporting by Bhargav Acharya in Bengaluru and Brenda Goh in
Shanghai
Editing by Vinay Dwivedi and Jane Merriman)
((Bhargav.Acharya@thomsonreuters.com; Outside U.S.
+918061822589; Reuters Messaging:
Bhargav.Acharya.thomsonreuters.com@reuters.net))