HNA Group

HNA’s Tianjin Tianhai says it needs a month to restructure its assets as pressure mounts on debt-ridden parent

Move follows Monday’s news that HNA has been given an extension to a bridging loan related to its flagship residential project at former Kai Tak Airport in Hong Kong

PUBLISHED : Tuesday, 16 January, 2018, 4:08pm
UPDATED : Tuesday, 16 January, 2018, 11:22pm

Tianjin Tianhai Investment, a subsidiary of Chinese aviation and shipping conglomerate HNA Group, said on Tuesday in a stock market filing that it is making plans over the next month for a major asset restructuring, under the direction of its debt-ridden parent.

The announcement adds further fuel to the rumours that its parent group is finding itself under mounting pressure to repay debt, as some of its units start missing repayments.

Trading in Tianhai’s Shanghai-listed yuan-denominated A- and hard-currency B-shares will remain suspended until it publishes more details on the restructuring, which are anticipated before February 15, the company said in a filing to the Shanghai Stock Exchange.

It did not elaborate on details of the revamp.

HNA Technology is a unit of HNA Group and owns 21 per cent of Tianhai, making it its single largest shareholder.

A source with knowledge of HNA said the restructuring might involve Ningbo Tongshang Bank, a small-scale lender, based in eastern Zhejiang province. Officials at Tongshang Bank could not be reached for comment.

The Tianhai announcement follows a move by HNA Group on Monday to extend a bridging loan related to a flagship residential project in Hong Kong.

Hong Kong International Investment Group, formerly known as HNA Holding International Investment Group, said it secured a six-month extension for a HK$2.4 billion (US$306.75 million) bridging loan, that was to be have been repaid on Monday.

The investment arm bought Lot 6562, at the site of Hong Kong’s old Kai Tak Airport, for HK$5.41 billion in December 2016.

HNA Group has aggressively been snapping up assets globally, racking up whopping debts in the process.

Its major strategic assets include Hainan Airlines Holding, the hotel group Hilton Worldwide Holdings, aviation servicing company Swissport, and a large shareholding in Deutsche Bank.

Hainan Airlines is also suspended from trading on the Shanghai exchange, as it too has said it is considering a potential asset restructuring.

Hainan Airlines weighs asset restructuring as parent HNA charts new course

A senior official with Shanghai Pudong Development Bank, one of HNA’s creditors, told the South China Morning Post it was simply having to accept a “wait-and-see approach” towards the conglomerate’s revamp efforts.

Trading was suspended in Tianhai’s A- and B-shares started last Friday before it published a statement on Sunday, claiming media reports about the company’s plan to sell its US-based electronics distributor Ingram Micro were false. Tianhai bought Ingram Micro for about US$6 billion last year.

It said Ingram Micro remained a key asset within the company’s transformation and development.

Tianhai’s debt to asset ratio stood at 85.5 per cent on September 30, 2017.

Its A-shares have risen 6.2 per cent this year, closing at 6.49 yuan (US$1.01) on Thursday.