On January 29, after Hainan Airlines Group exposed the news of bankruptcy restructuring, three of its listed companies jointly issued a statement on the 31st saying that its tens of billions of dollars were misappropriated by shareholders, and two of them issued bankruptcy restructuring and net profit pre-loss announcements on the same day.
The three listed companies are Hainan Airlines Holding Company, HNA Infrastructure Investment Group Corporation (HNA Foundation), and Supply and Marketing Grand Group Corporation (CCOOP), according to the Jan. 31 news. In a joint statement, they said that up to 61.5 billion yuan (RMB) of funds had been misappropriated by shareholders and other relevant authorities.
The statement did not identify the shareholders who misappropriated the funds, saying only that the three listed companies and their subsidiaries provided 46.5 billion yuan in illegal guarantees after HNA declared bankruptcy and reorganization.
Two days ago, HNA Group issued a statement through its official WeChat public number saying, “On January 29, 2021, HNA Group received a Notice issued by the Hainan Provincial High People’s Court, which essentially reads, “Relevant creditors have applied to the court for bankruptcy reorganization of HNA Group because HNA Group cannot settle its debts as they fall due.”
The statement came after HNA Group co-founder and chairman Chen Feng was replaced as party secretary by Gu Gang, the head of a joint task force appointed by the Hainan provincial government on Jan. 26. Chen Feng had been restricted by authorities from spending money last September. Chen Feng is known to have crossed paths with former Chinese Communist Party Vice Chairman Zeng Qinghong.
Among the three listed companies that issued the above-mentioned joint statement, HNA Holdings and HNA Foundation also released their respective company statements on the 31st, covering matters such as bankruptcy restructuring and pre-loss results.
HNA Holdings’ announcement said, “Received the Notice served by the Hainan Provincial High People’s Court, as the company is unable to settle its debts as they fall due and obviously lacks the ability to pay them off, Beijing Fulite International Freight Forwarding Co., Ltd. has filed an application to the court for the reorganization of the company.”
HNA Infrastructure Investment Group Co. disclosed an announcement of its 2020 performance forecast, expecting to achieve a net profit loss attributable to shareholders of the listed company of 5.9 billion yuan to 8 billion yuan in 2020, a decrease in net profit of 386.43% to 559.57% compared to 2019.
The last debt data released by HNA Group showed that its total debt amounted to 706.7 billion yuan as of June 2019.
According to an announcement made by HNA Investment, another listed company under HNA Group, on the 31st, HNA Investment has received notification letters from HNA Group, HNA Capital and HNA Industry, which said: due to an obvious lack of solvency, the creditor Hainan Bank Co. applied to the court for the reorganization of HNA Group; the creditor Jinyuan Securities Co. The creditor Chang’an Bank Co., Ltd. applied to the court for the reorganization of HNA Industry.
In addition, HNA’s largest creditor is the Communist Party of China Development Bank, which also serves as the chairman of HNA’s creditors’ committee.
Previously, HNA has sold its assets, including Swissport and U.S. IT distributor Ingram Micro.
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