Creditors seek bankruptcy of China's once high-flying HNA

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/>