CHINESE CONGLOMERATE HNA GROUP ANNOUNCES BANKRUPTCY

The Chinese conglomerate, which was established in 2000, was actively buying up assets all around the world until 2017, but now it launches bankruptcy proceedings. The holding found itself in debt to holders of securities and expects the possibility of restructuring. The company's management has already announced that it plans to cooperate with the court, hoping thereby to protect the interests of its creditors in the process of the upcoming financial audit.

The HNA Group emerged out of the restructuring of private company Hainan Airlines. Its founder, Chen Feng, began with creation of a company in 1993. The company had several planes that brought Russian and Chinese tourists from the cold north to hot Hainan at its disposal.

The tropical island, known as the "Chinese Hawaii" for its climate and beaches, has proven to be an attractive holiday destination.

Soon, the company began to grow rapidly.

Its largest foreign shareholder until 2017 was George Soros. The airline, distinguished from its competitors by punctuality and high standards of service, quickly expanded into logistics, real estate and tourism. By 2017, the HNA Group had grown into a global conglomerate with 290,000 employees and at least RMB 1 trillion in assets ($ 154.8 billion). At the same time, its debt amounted to about 500 billion yuan.

In 2017, China's financial regulators took harsh measures against a number of companies for fear of risks to the country's banking industry. Major holdings, including HNA Group, Anbang Group, Dalian Wanda Group and Fosun Group, have come under close government surveillance. After Anbang insurance company had unsuccessfully tried to acquire the Starwood hotel chain for $ 13 billion, and its former executive was imprisoned on charges of embezzlement and fraud, it became clear that the days of asset acquiring for HNA Group were over.

In February 2020, a working group was formed to restructure the HNA Group's finances, which consists of government officials, including representatives from the regional authorities of Hainan province and the aviation industry regulator.

The founder of the company, Chen Feng, who controlled the business for almost three decades, was expelled from the Committee of the Chinese Communist Party, which now runs the conglomerate without him.

Experts say that the HNA Group companies still have many assets, the sale of which could actually help to get rid of the existing debt obligations.