China’s HNA, hit by the coronavirus, is effectively taken over by the government

HNA Group, which was one of China’s most aggressively acquisitive companies until mounting debts forced it to abandon its global ambitions, was effectively taken over by the Hainan provincial government, making it one of the first major corporate victims of the coronavirus epidemic. Blaming the virus, which has hit the conglomerate’s core airline business, HNA said in a Saturday statement that Hainan government officials were called in to “effectively defuse risks and safeguard the interests of all parties.” Officials from the Civil Aviation Administration of China as well as state-owned China Development Bank Corp., one of HNA’s biggest creditors, are among the members of a new working group. HNA netted assets ranging from prime New York real estate, a big stake in Deutsche Bank, golf courses and hotel chain Hilton Worldwide. But no sooner had HNA built its global empire than it was forced to dismantle it to repay debts that reached $98b by 2018. Through those divestments HNA retreated to its original core aviation business as operator of Hainan Airlines and several subsidiaries, including Hong Kong Airlines. In different times, Hainan Airlines could have been the cash cow that stabilized the group, but the coronavirus epidemic has destroyed those hopes by crippling China’s aviation sector. <br/>