News
HNA Group sells Azul holding to United Airlines
May 4th 2018
China’s indebted HNA Group has sold approximately 20% of its shareholding in Azul Brazilian Airlines to another minority shareholder in the South American carrier, United Airlines. Read More »
Following the US$138 million plus transaction, HNA Group’s equity has been reduced from approximately 23% to 17.9% and United increased its investment in Azul from 3.7% to 8%. HNA said the sale would better balance its asset structure, improve asset liquidity and have a positive impact on its annual results. The conglomerate expected the transaction to generate a profit of US$42 million.
This year, HNA has raised more than US$6.5 billion from asset sales, including two land plots in Hong Kong and holdings in Deutsche Bank, Park Hotels and Resorts and Hawker Pacific. The conglomerate has approximately US$20 billion in maturing debt to service in 2018.
Both HNA and United acquired their original shareholdings in Azul to secure a larger presence in South America. HNA carriers have not announced plans for routes into Latin America but United has grand plans for the market.
“Following our initial investment in 2015, connecting traffic between our airlines is at an all-time high, significantly benefiting our customers traveling between the U.S. and Brazil,” said United CFO, Andrew Levy. “Azul's strong network in Brazil, unique business model and exceptional customer service make this transaction a good long-term investment.”
Azul and United are reported to be considering a U.S.-Brazil joint venture that would “give American and LATAM a run for their money”. No more details have emerged about the venture. Brazil and the U.S. signed an Open Skies agreement last March.
