HNA’s creditors get the go-ahead to sell global assets in multibillion dollar restructuring, including property in New York, Hong Kong

Up for grabs are 321 companies and assets including a 45-storey Manhattan office tower and a villa in Hong Kong’s most exclusive residential address
The villa at the Twelve Peaks project at 12 Mount Kellett Road may fetch up to HK$763.4 million, 51 per cent more than its 2015 purchase price

HNA Group

Sandy LiandIris Ouyangin Shenzhen

Published: 5:30pm, 1 Nov 2021

Why you can trust SCMP

Creditors of the HNA Group have been given the go-ahead to sell its assets after the Hainan High Court in HNA’s home province on Sunday approved the multibillion dollar restructuring of China’s largest corporate bankruptcy case.

Up for grabs are 321 companies out of more than US$40 billion of HNA’s corporate assets spread out in aviation, airports, finance and commerce, including a 45-storey Manhattan office tower and a luxury villa in Hong Kong’s most exclusive residential address.

Three of the senior executives of HNA’s major offshore arm HNA Group (International), including vice-chairman and chief executive Wang Shuang, are directors of a company called Fortune Runner Hong Kong Investment, the owner of a 4,241-square foot (394 square metres) house in the Twelve Peaks development at 12 Mount Kellett Road on The Peak in Hong Kong. PricewaterhouseCoopers (PwC) was appointed on October 21 as the receiver of the house.

“This property should sell for a profit,” said Vincorn Consulting and Appraisal’s managing director Vincent Cheung, who values the property at between HK$633.6 million and HK$763.4 million, or nearly 51 per cent more than its purchase price in 2015. “Prices for houses on The Peak increase rapidly in recent months considering rare supply.”

House 6 at the Twelve Peaks development at 12 Mount Kellett Road at The Peak in Hong Kong on 4 July 2018, registered to a shell company in which the senior executives of HNA Group (International) are directors, according to Hong Kong’s Company Registry data. Photo: Edmond So.

HNA Group, founded by former Chinese civil aviation bureaucrat Chen Feng around the business of Hainan Airlines, grew into one of China’s largest private conglomerates and most profligate offshore asset buyers over two decades. At its peak before scrutiny by Chinese financial regulators led to its break-up, HNA Group owned tens of billions of dollars in assets around the world, from the largest stake in Deutsche Bank to a quarter of Hilton Hotels and Resorts, and four tracts of oceanfront land at Hong Kong’s former Kai Tak airport.

Those assets have either been sold, or are on the auctioneer’s block for disposal. Entities linked to a 45-storey office tower at 245 Park Avenue in Manhattan filed for Chapter 11 bankruptcy in Delaware, Bloomberg reported, citing court documents. The building was valued by HNA at US$2.21 billion three years ago when it was offered for sale. Tax authorities in Chicago and New York City were listed as the two biggest creditors, to whom HNA Group owes more than US$23 million in property taxes.

245 Park Avenue in Manhattan. Photo: Bloomberg

Hainan’s court approved the sale of 321 of HNA Group’s companies on Sunday. The conglomerate’s sprawling business holdings will be reorganised into four major segments.

The group’s aviation assets including the crown jewel Hainan Airlines, the largest private-sector carrier, has been transferred to a group of investors led by Liaoning Fangda Group, a conglomerate based in north-eastern China with businesses from steel and health care to property. Fangda has injected 38 billion yuan of cash into Hainan Airlines, two-thirds of it used to enrich the carrier’s cash flow.

HNA Group sold a 4,600-square foot luxury penthouse last month at 39 Conduit Road at the Mid-Levels, the primary address of the founder Chen whenever he’s in Hong Kong, for HK$312 million. The property was sold at a 28 per cent discount to HNA’s 2015 purchase price since coming on the auction block in August.

The property was bought by Billion Able Corporation in April 2015 for HK$433 million, or about HK$94,150 per square foot, according to Land Registry and Companies Registry records. Chen, who was detained last month by Chinese police, was the sole director of Billion Able.

This article appeared in the South China Morning Post print edition as: Creditors of HNA get the nod to sell assets

Post