News
Report: HNA Group to shed 100,000 staff
March 16th 2018
China’s distressed HNA Group is planning to cut as many as 100,000 jobs, or approximately a quarter of its workforce, as the conglomerate’s liquidity crisis continues to worsen, according to a report by Risk, Event Driven and Distressed Intelligence (REDD). Read More »
In the interim, HNA Group has begun a sweeping asset restructuring drive. Hainan Airlines, the mainline carrier of HNA Aviation, this week said it would take over HNA’s controlling stakes in Air Guilin and West Air, as well as MRO providers HNA Aviation Technology and SR Technics. Hainan Airlines also plans to increase its shareholdings in HNA Hospitality Group and a Hainan-based flight training school.
HNA Group has also said it might sell off a 20% stake in Bohai Capital, the holding vehicle that owns aircraft lessor Avolon.
The Haikou-headquartered conglomerate needs money fast to appease creditors and service its burgeoning debt. HNA Group last week announced its intention to list a 65% stake in Swiss catering firm, Gategroup, by the end of this month on the Zurich Stock Exchange. The IPO is expected to fetch approximately US$375 million, which will not make much of a dent in the estimated US$20 billion debt the Group has maturing in the next 18 months. The conglomerate acquired Gategroup for US$1.9 billion in 2016.
In February, it was disclosed that HNA subsidiaries Tianjin Airlines and Urumqi Air would issue additional equity to investment vehicles linked to their respective provincial governments. The Tianjin Bonded Zone Investment Co. is investing an extra RMB400 million (US$64 million) in Tianjin Airlines; the local government in Urumqi has pledged RMB450 million of fresh investment in Urumqi Air.
There is increasing pressure on HNA to reassure investors of its financial soundness after it went on an estimated US$50 billion global investment spree in the last two years. The group also controls nine Chinese and two Hong Kong airlines: Hong Kong Airlines and HK Express in Hong Kong and Hainan Airlines, Air Chang’an, Beijing Capital Airlines, Fuzhou Airlines, Guangxi Beibu Gulf Airlines, Lucky Air, Urumqi Air and West Air.
It was widely reported that South China Bluesky Aviation Oil, a subsidiary of China National Aviation Fuel Group, threatened at the beginning of March to stop supplying fuel to Hainan Airlines from March 18 if the airline failed to settle its dues dating back to October 2017.
