• Sat
  • Dec 27, 2014
  • Updated: 7:52am

HNA eyes property of Gome founder

PUBLISHED : Saturday, 20 August, 2011, 12:00am
UPDATED : Saturday, 20 August, 2011, 12:00am
 

Airline and tourism services operator HNA Group is in talks to buy a commercial block in Beijing owned by Wong Kwong-yu, the jailed founder of the biggest electrical appliance retailer on the mainland.

With Wong in jail, HNA Group, controlled by the government of Hainan province, is negotiating a deal with Beijing Gome Appliances. The company, owned and controlled by Wong, is the parent company of Hong Kong-listed Gome Electrical Appliances Holding, which operates the electrical-goods chain.

'We have been negotiating with Gome for a while but the details of the transaction have not yet been finalised,' said a spokesman for the HNA Group, Wu Fung.

Wu declined to confirm mainland media reports it was offering 6 billion yuan (HK$7.3 billion) for the property.

Wong is the founder of and was, until his conviction and imprisonment last year, chairman of Gome Electrical Appliance Holdings. He received a 14-year jail sentence for bribery, insider trading and stock manipulation.

The latest attempt to secure a flagship Beijing address by HNA, the parent company of the mainland's fourth-largest airline, Hainan Airlines, comes after it was outbid by Citic Group in a record-setting auction in Beijing in May.

Citic's 6.3 billion yuan offer trumped HNA Group's 5.9 billion yuan bid for the last six blocks of prime commercial land in Beijing.

Wong, who lost a battle to wrest back control of Gome Electrical Appliances Holdings, is seeking to raise cash by disposing of real estate. He needs to replenish his cash holdings in part to pay fines levied by the court.

The property in question, in west Beijing, is one of the assets he put up for sale. Wong had asked for 10 billion yuan for the complex, which has a floor area of 550,000 square metres and has been up for sale since 2008.

The project is an integrated commercial complex including retailing space, an exhibition and conference centre, a hotel and offices.

Wong wanted to float his property portfolio on the mainland by injecting it into Shenzhen-listed Beijing Zhongguancun Technologies, but shareholders vetoed the plan.

HNA Group, an airline-to-property conglomerate, has total assets of 300 billion yuan. The group acquired Hong Kong-based tour agent Hong Thai Travel earlier this year.

826

The number of Gome stores on the mainland as of last year. Last November it reported third-quarter profit of 477.6 million yuan

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