Economy

HNA Group Declares Bankruptcy, Begins Restructuring

HNA Group Declares Bankruptcy, Begins Restructuring”

It said creditors asked "for bankruptcy and reorganization of our group because the group can not repay their debts".

HNA Group, which owns one of China's largest passenger carriers, Hainan Airlines, said in a statement on Friday that its creditors had filed a petition with the Hainan Province High People's Court for the group's bankruptcy and reorganization "as it could not pay off due debts".

HNA Technology Co. fell as much as 9.8% in Shanghai on Monday and CCOOP dropped 9.9% in Shenzhen; Hainan Airlines plunged 9.8%, while HNA Infrastructure slumped 8.9% before paring most of the losses.

HNA added that it would cooperate with the court in conducting a judicial review, push forth with debt disposal work, and support the court in protecting creditors' rights.

Friday's announcement signals that the tumultuous saga of HNA is in its final chapter.

HNA has controlling stakes in 18 listed companies.

Three units of HNA, once China's most acquisitive conglomerate, said almost $10 billion had been embezzled by shareholders, in disclosures to stock exchanges that come amid a government-led probe into the deeply indebted group.

The group still has stakes in several Chinese and global airlines, an industry decimated by the pandemic - for example, it owns Hong Kong Airlines, which laid off hundreds of staff a year ago amid a steep drop in tourism. HNA Infrastructure Investment Group Co. and CCOOP Group Co. also reported they have failed to disclose about 46 billion yuan in debt guarantees, according to separate filings to the Shanghai and Shenzhen stock exchanges on January 30.

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Three units of HNA, once China's most acquisitive conglomerate, said almost €8bn had been embezzled by shareholders, in disclosures to stock exchanges that come amid a government-led probe into the deeply indebted group.

The company had indicated in a statement last week that a joint working group headed by Gu had settled on a debt reduction plan.

HNA is also subject to multiple lawsuits from investors and clients to whom it is indebted, including consultancy firm Deloitte.

HNA is not the only conglomerate to be caught in the crosshairs of China's financial regulators.

Founded as an airline in the 1990s by entrepreneur Chen Feng with seed money from George Soros, the company emerged from near obscurity to mount a buying binge that saw it become the top shareholder of Deutsche Bank and Hilton Worldwide Holdings.

In December HNA agreed to sell Ingram Micro to United States fund manager Platinum Equity in a $7.2 billion deal.

On Thursday, HNA revealed a major management reshuffle as its co-founder Chen was left off of the company's Communist Party committee, a key decision-making body with powers similar to the company's board.



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