HNA Holdings restructuring.
On February 9, HNA Holdings issued an announcement disclosing details of its bankruptcy reorganization plan, in which the company plans to rectify the situation by way of debt transfer.
According to the announcement, part of the interest-bearing ordinary debts of non-bailout nature will be transferred to shareholders and related parties HNA Group Limited and HNA Aviation Group Limited for settlement in equal proportion, and the amount of debts to be transferred is expected to be no less than approximately RMB 72.5 billion.
In order to ensure the practicality of the debt transfer proposal, HNA Holdings has obtained the support opinion of the majority of creditors of the head office/headquarter level creditors committee of HNA Group’s financial institutions. HNA Group and Airline Group have issued a Letter of Undertaking in relation to the debt transfer proposal, unconditionally and irrevocably undertaking to agree to settle on behalf of the Company the same amount as the shareholders and related parties’ non-operating capital appropriation, undisclosed guarantees subject to liability and assets subject to attention liabilities in the same amount as the losses caused to the company.
The announcement said, “If problems arise in the implementation of the above debt transfer program, Hainan Province will coordinate and promote the relevant parties to resolve them.”
The announcement mentioned that the company has been applied for bankruptcy reorganization by creditors, and there is uncertainty whether the reorganization will be accepted by the court and whether the company will enter the reorganization process. If the company successfully enters the reorganization process and completes the implementation of the reorganization plan, the company’s compliance issues will be solved and will help improve the company’s financial structure, resolve the debt crisis and put the main business back on the track of healthy development; if the reorganization fails, the above compliance issues may not be solved and the company will be declared bankrupt by the court.
As early as January 29, HNA Group announced bankruptcy reorganization. As one of the listed companies of HNA Group, on January 30, HNA Holdings also issued an alert announcement on the application for company reorganization by creditors, and said that the company is actively communicating with shareholders and related parties to urge them to solve the problems of non-operating capital occupation and undisclosed guarantee as soon as possible.
HNA Holdings is a listed company in the aviation sector of HNA Group, which includes Xinhua Airlines, Changan Airlines, Shanxi Airlines, Xiangpeng Airlines, Fuzhou Airlines, Urumqi Airlines and Beibu Gulf Airlines.
The Interface News quoted informants as reporting that Hainan Airlines will remain independent as an airline in the future, keeping the private entity intact, and will not be split up and sold to state-owned airlines such as Air China, China Eastern Airlines and China Southern Airlines. Next, HNA will also introduce new private capital as a strategic investor.
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