HNA Group to reorganise after bankruptcy filing from creditors
ONE of China's largest conglomerates with interests mainly in the aviation and tourism sectors HNA Group says it has received formal notice of bankruptcy filing by creditors from the Hainan High People's Court on January 29
03 February 2021 - 19:00
Creditors have 'filed an application for the initiation of reorganisation procedures against our company, on grounds that we cannot pay off due debts', HNA Group disclosed.
It added that it will comply with legal instructions and 'promote debt disposition actively', while ensuring that businesses under its holding continue to operate as usual.
This marks the latest development to hit the troubled group, which in March 2020 requested a lifeline from the provincial government.
Gu Gang, chairman of Hainan Development Holdings, the government's investment arm, was leading a joint working group to address the firm's liquidity risks, as its airlines reeled from the collapse in travel demand during the coronavirus outbreak.
The group was established in 1993, and has since grown to a massive conglomerate featuring 14 airlines - including Hainan Airlines, Lucky Air and Grand China Air - and more than 900 aircraft.
Between 2015 and 2017, the group underwent an acquisition spree, purchasing stakes in multiple companies around the world, including a number in the aviation sector. These include stakes in Virgin Australia, which it formerly held, Zurich-based MRO SR Technics, as well as lessor Avolon, which was purchased through HNA Group leasing arm Bohai Leasing.
Meanwhile, Hainan Airlines has forecast a staggering full-year net loss of between CNY58 and 65 billion (US$9-10 billion), with asset impairment costs expected to account for a significant portion of its red ink.
The carrier disclosed that it expects operating losses for the year ended December 31 to be around CNY16.5 billion due to the collapse in travel demand arising from the coronavirus pandemic, reports London's Air Cargo News.
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