HNA Group halts trading of its note in Shanghai as a hasty plea for time caused panicking investors to flee its debt issues

HNA Group halted the trading of its 5.99 per cent, 3 billion yuan note in Shanghai, after its price plunged by as much as 31 per cent

The company apologised for a hastily called teleconference overnight to announce the postponement of payments on a separate tranche of 1.15 billion yuan bond, due today

Reading Time:2 minutes

Published: 11:48am, 15 Apr 2020Updated: 11:48am, 15 Apr 2020

HNA Group, a former asset acquirer that is trimming its loans under de facto state ward, halted the trading of one of its notes in Shanghai after panicked investors fled, as the economic aftermath of the coronavirus pandemic throws a wrench into one of China’s biggest debt workouts.

Trading of HNA’s 5.99 per cent 3 billion yuan (US$425 million) note was halted in Shanghai until 2:57pm, after its price plunged by as much as 31 per cent in early transactions, according to a statement to the Shanghai Stock Exchange, where the debt issue is traded.

Investors fled HNA’s debt after the aviation conglomerate, based in the Hainan provincial capital of Haikou, hastily called a teleconference overnight with creditors to postpone paying the principal and interest by 12 months on a separate tranche of 7-year bonds worth 1.15 billion yuan due today. The bond had been suspended from trading since April 9.

The meeting was hastily arranged “because the number of investors is relatively large,” HNA said in a statement, adding that it “sincerely apologises” for the “lack of preparation.” Chinese media said invitations were sent out 30 minutes before the meeting’s commencement, and many creditors failed to receive the notice.

“Due to the coronavirus pandemic, the Group’s core businesses including aviation, tourism, hotel and commercial [operations] are significantly impacted,” HNA said. “Although we made various efforts to resume work and production, it is hard for the operations and management to recover in the short term, and the pressure on cash flow is tremendous.”