Bloomberg Hong Kong
Months after HNA Group Co began reversing a $40bn overseas buying spree and suspended trading in seven listed units, investors have put a price on the turmoil: $10bn.
That’s how much the subsidiaries had lost in market value as of yesterday, when HNA Technology Co plunged in Shanghai, where it traded for the first time since January.
Since the suspensions started being lifted months ago, the seven units have lost about a quarter of their total market value, underscoring the challenges the aviation-to-hotels conglomerate faces as it sells assets to pay down one of Asia’s largest debt piles.
While HNA has offloaded more than $17bn in real estate and shareholdings, the group missed payments on a 300mn yuan ($44mn) loan earlier this month, a sign that liquidity is still a problem.
HNA units have struggled to regain the confidence of bond investors as well, despite signs that the group clinched the support of the government.
HNA’s Bohai Capital Holding Co, which in June raised only about half of what it wanted from a bond sale, made another attempt this month, and again got just about half of what it sought.
In another red flag, HNA Ecotech Panorama Cayman Co said in September that it pushed back the redemption of $105.6mn in notes by a further eight weeks. That means the group, once at the forefront of China’s overseas buying binge, to still has to sell more of its holdings to raise money.
HNA’s plans have also been complicated by the sudden death of 57-year-old Co-Chairman Wang Jian in July.
Wang was said to be the mastermind behind the purchase of many of the assets that are now being sold.
Chairman Chen Feng has since stepped up, promoting two family members as key lieutenants in August and tightening his control over the group as he seeks to persuade banks, investors and the government to restore their confidence in HNA. How the HNA drama turned tragic as buying spree went sour
HNA plans to exit its investment in Deutsche Bank AG, seek a buyer for its container-leasing business Seaco and intends to surrender eight floors of office space in Hong Kong, people familiar with the matters have said.
HNA Technology Co, which had been halted from trading since January, dropped by the 10% daily limit to 5.84 yuan as of 1:01pm in Shanghai yesterday.
The unit, which runs Ingram Micro Inc, resumed trading after it withdrew plans to buy an e-commerce company, in line with group efforts to focus on its core aviation business.
The resumption ends months of suspensions for the seven subsidiaries with a current combined market value of about 196.5bn yuan.
The company had asked for the halts, citing restructuring plans, some of which have yet to materialise.
Chinese companies have a history of using trading suspensions to prevent their stocks from falling further amid negative news.
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