HNA Group divests aviation unit to strategic investor in business break-up as bankruptcy reorganisation progresses
- The handover of aviation unit to strategic investor Liaoning Fangda forms part of HNA’s break-up under its bankruptcy reorganisation
- Founder Chen Feng and CEO Adam Tan were arrested by Chinese police in September for undisclosed ‘suspected crimes’
HNA Group, China’s once high-flying conglomerate, has officially handed its core aviation business to a strategic investor, after breaking up its core businesses under a bankruptcy reorganisation to untangle US$111 billion of debt.
The group has carved out the aviation unit including its flagship carrier Hainan Airlines to Liaoning Fangda Group Industrial, it said in a statement posted on its social media on Wednesday. A working committee overseeing its debt restructuring will continue to complete its tasks, it added.
Gu Gang, the executive chairman who leads the working committee, will no longer serve as the leading secretary for the Communist Party in HNA Group after completing the handover, having achieved substantial restructuring headway and risk mitigation, according to the statement.
“We met in unexpected times and cherished each other’s company,” HNA added. “Wish Hainan Airlines and all brother airlines a safe landing and rebirth.”
Liaoning Fangda, the aviation unit investor, is a Beijing-based conglomerate with interests in carbon, steel and pharmaceutical industries. Its listed vehicles include Fangda Carbon New Material, Northeastern Pharmaceutical Group and Fangda Special Steel Technology.
Founded in 2000 by Chen Feng around its Haikou-headquartered Hainan Airlines, HNA Group attracted investors including George Soros as it embarked on a US$50 billion debt-funded acquisition binge from 2015.
It amassed trophy buildings in the US and stakes in global industry names including Deutsche Bank, Hilton Hotels and Swissport, before a clampdown on capital outflows and financial risks by Chinese authorities sent it into a tailspin.
