Advertisement
Aviation
BusinessCompanies

State airlines shy away from HNA restructuring, which is postponed for three months

  • The state carriers have stayed away from HNA because of the impact of Covid-19, sources say
  • Deadline for the submission of a restructuring proposal has been postponed to November 10

Reading Time:4 minutes
Why you can trust SCMP
HNA Group’s debt amounts to at least US$187 billion. Photo: Reuters
Iris Ouyang
Embattled Chinese conglomerate HNA Group will delay the submission of a proposal for the restructuring of its heavily indebted airlines-to-property business, as China’s state-owned carriers have steered clear of bailing out the country’s biggest private-sector carrier, according to sources familiar with the matter.
Advertisement
The restructuring of Hainan-based HNA will most probably involve consortiums comprising multiple companies. The government working group that seized control of HNA in late February 2020 will make sure Hainan Airlines remains a private company and will ring-fence it from the country’s three biggest state-owned carriers, said the sources, speaking on condition of anonymity. HNA Group’s debt amounts to at least US$187 billion.

HNA Group and Hainan Airlines did not respond to requests for comment.

HNA, which used to own a global assets portfolio that ranged from the largest stake in Deutsche Bank to 25 per cent of Hilton Hotels, entered bankruptcy restructuring in January, a year after its previous management was ousted in a state takeover. As a state ward, the company began looking for strategic investors publicly in March and has been shedding its international assets.

A deadline for HNA’s restructuring plan was postponed to November 10 from August 10 by the Hainan High People’s Court in a ruling last Friday. The provincial authorities, which are represented on the committee that oversees HNA, want the management of HNA’s airport assets – including Haikou Meilan International Airport, the gateway to Hainan province’s capital – to remain in state hands. They also want at least one member of any consortium for airport assets to be a state-owned enterprise, the sources said.

01:12

Blue high-speed trains match south China's Hainan island’s sky and sea

Blue high-speed trains match south China's Hainan island’s sky and sea

“The work related to laying down of the proposal for restructuring plan is still undergoing. The related content of the proposal has not been finalised. The company and its subsidiaries applied to the Hainan High People’s Court to extend the submission deadline of the proposal for three months,” Hainan Airlines said in a filing on Friday. The airline was successful with its application, and said it would continue to work on the proposal based on asset investigation, liability review and the introduction of strategic investors.

Advertisement
Advertisement