Time for HNA to check out of Spanish hotel after getting kicked off its board?
Proceeds from the sale could ease Chinese conglomerate’s refinancing pressure. After US$40b of purchases since the start of 2016, interest expenses have bloated to US$2.4b, exceeding earnings before interest and taxes
HNA Group’s precarious grip on a US$2.2 billion Spanish hotel company remains in doubt as a mountain of debt becomes due, and China puts the squeeze on its most-prolific acquirers.
The Chinese conglomerate, whose assets include a quarter of Hilton Worldwide Holdings, owns about 30 per cent of Madrid-based NH Hotel Group.
But HNA is in Spanish limbo: its directors have been booted off the board in a shareholder revolt, while Beijing’s crackdown on overseas deals would obstruct any buyout that could bring NH Hotel to heel. Analysts anticipate a sell-out.
A sale of HNA’s stake, which has a market value of more than €550 million (US$641 million), might attract European hotel operators or real-estate funds, according to Oddo & Cie.
The Spanish company’s inventory of almost 60,000 hotel rooms – stretching from New York to Luxembourg to Shijiazhuang in China – would appeal to Accor, making the French rival the most obvious suitor, according to Bankinter Securities.
