Creditors of China’s HNA Group have applied to a Chinese court for the company to be placed in bankruptcy and restructured, potentially giving a fresh start for the remaining assets of the once-highly acquisitive conglomerate. HNA Group said in a WeChat post on Friday it had been notified by a Hainan court that its creditors had acted because it was unable to pay its debts. It said it would cooperate with the court. HNA Group was once one of China’s most aggressive dealmaking firms. It used a $50b global acquisition spree, mainly fuelled by debt, to build an empire with stakes in businesses from Deutsche Bank to Hilton Worldwide. Its flagship business is Hainan Airlines. But its spending drew scrutiny from the Chinese government and overseas regulators. As concerns grew over its mounting debts, it sold assets such as airport services company Swissport and electronics distributors Ingram Micro to focus on its airline and tourism business. It had 706.7b yuan ($109.8b) in debts at the end of June 2019, the last bond report it made public that year showed. Its largest creditor is the state-backed China Development Bank (CDB), which also chairs the company’s creditor committee. CAAC News, the news portal run by China’s aviation regulator, said HNA would reduce debt through measures such as converting debt to equity or rollovers to guarantee investors’ interests. It also hopes to attract fresh equity from new strategic investors.<br/>
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Three units of HNA, once China's most acquisitive conglomerate, said nearly $10b had been embezzled by shareholders, in disclosures to stock exchanges that come amid a government-led probe into the deeply indebted group. A total of 61.5b yuan ($9.57b) had been embezzled by shareholders and other related parties, Hainan Airlines Holding Co, HNA Infrastructure Investment Group Co and Shenzhen-listed CCOOP Group Co said late on Friday. The three companies and their subsidiaries had also provided non-compliant guarantees for 46.5b yuan in financing, according to the statements filed after creditors of their parent applied to a court for the conglomerate to be placed in bankruptcy and restructured. The move came after a local government-led working team concluded due diligence at HNA earlier in January, and laid out risk disposal plans, enabling it to move to the next stage of resolving a multi-year liquidity crisis. The government-appointed working team expects as many as 500 companies linked to HNA Group to go into bankruptcy restructuring, Chinese financial magazine Caixin reported on Saturday.<br/>
The Chinese government plans to dispose of HNA Group’s non-aviation assets through a trust, according to people familiar with the matter, as the provincial authorities that took control of the once high-flying conglomerate last year move ahead with its restructuring. The trust will manage the sale of HNA’s assets not in the aviation space, a process that will likely take some time, said the people, asking not to be identified because the plan is yet to be made public. A state-backed entity will become a strategic investor in what’s left of HNA, they said. Under the plan, HNA’s creditors will be allowed to swap their debt into equity in the new, pared-back company or gain a stake in the trust managing the divestment of the other assets, depending on their lender status, the people said. The plan has been approved by Chinese regulators and is expected to be implemented soon, they said. A spokesman for HNA didn’t immediately respond to requests for comment, while calls and an email to the Hainan government weren’t returned. Rumors about HNA’s situation have been swirling for days, with Hu Xijin, the editor-in-chief of China’s state-run Global Times newspaper, tweeting Friday that HNA Group’s operations are “coming to an end,” and that an announcement on restructuring could come at any time. <br/>
Norway proposed 16.3b crowns in extra fiscal spending this year to help businesses, including Norwegian Air, and municipalities weather the COVID-19 crisis. The package includes 1.5b crowns for a hybrid loan to the struggling airline, which is undergoing a restructuring, provided terms are agreed and pending parliament’s approval. Norways’s government said last week it would back Norwegian, which aims to emerge from court-ordered bankruptcy protection as a slimmed-down carrier focused primarily on the Nordic region.<br/>
Cash-strapped Hong Kong Airlines (HKA) has been penalised for breaching the rules of a government coronavirus wage subsidy scheme that provided it HK$154.3m (US$19.9m), the operator confirmed on Saturday. The case came to light after a concern group formed by ex-cabin crew filed a complaint against the company, saying it had noticed discrepancies in the sum the airline received and the amount passed to staff. The ailing carrier originally tapped the city’s HK$81b Employment Support Scheme (ESS) to fund salaries from June to August then again between September and November last year, money intended to protect the jobs of its then 2,940 employees. HKA said it used “all the funds” from the scheme to cover a portion of salaries during those six months. However, it has now acknowledged being hit with a “penalty” over a discrepancy between its employee headcount for the second three-month period and the headcount provided to the government. The Hong Kong Airlines Concern Group, formed by flight attendants made redundant in December, said it complained to the authorities about the financial help the airline received earlier this month.<br/>
Regional carrier PSA Airlines is again flying its MHIRJ CRJ jets after having grounded the aircraft for mandatory inspections, PSA parent American Airlines says. “PSA Airlines resumed regular operations today following the temporary removal of its aircraft from service,” American says on 29 January. “All aircraft inspections are complete and all aircraft are in place for today’s operation.” “We expect minimal disruption to passengers today with a small number of planned cancellations and delays,” the carrier says. The jets were removed from the network on 28 January after an airworthiness directive from the FAA mandated checks on three of the aircraft’s nuts and bolts on the nose landing-gear doors “that need to be re-torqued”, American says.<br/>
Cash-strapped Air Namibia survived liquidation attempts by defunct Belgian flyer ChallengeAir SA on Friday when the two firms reached a E10m settlement minutes before liquidation proceedings were due to kick off. ChallengeAir had filed for the loss-making flag carrier’s liquidation last year, arguing Air Namibia was insolvent and unable to repay about 253m Namibian dollars ($17m) in debt incurred for the lease of a Boeing 767 back in 1998. Air Namibia had cancelled the lease agreement, after finding that the aircraft was defective. Negotiations between the two firms have been deadlocked since 2019. Air Namibia will pay ChallengeAir E9.9m, beginning with a E5m payment before Feb. 18 and monthly instalments thereafter until January 2022, according to a settlement agreement seen by Reuters.<br/>
Australians stranded in Europe were dealt a double blow on Friday with the Australian government acknowledging it had inadvertently revealed sensitive details of all passengers booked on a repatriation flight from London following news Emirates had suspended all flights from the United Kingdom. The Department of Foreign Affairs and Trade contacted passengers booked on a government organised repatriation flight scheduled to depart London for Darwin on Saturday, informing them of the data breach, which is at least the fourth such data breach of stranded Australians information by Dfat since August. The email said the full name, gender, date of birth, email address, passport details (number, expiry, issuing country), Australian citizenship status, phone number, current location, and flight booking reference of those booked on the flight had been “unintentionally copied to one of the department’s consular clients on 24 January”. Meanwhile, on Friday the Australian health minister, Greg Hunt, said the Australian government remained open to scheduling further repatriation flights after Emirates suspended all flights from the UK from Friday. The suspension followed a British government announcement it was closing its border to passenger flights from the United Arab Emirates in an attempt to stop new Covid-19 strains entering the country. “If more flights are needed, more will be provided,” Hunt said, noting the government announced 20 extra repatriation flights earlier in January.<br/>