HNA once wanted to rule the world. Now he faces bankruptcy

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Creditors of the Hainan-based company have asked a Chinese court to approve the company’s bankruptcy plans, HNA said in a statement Friday. Creditors have said the conglomerate cannot repay its debts.

The bankruptcy filing marks a dramatic fall for one of the country’s most important companies. HNA started life as an airline but quickly grew through investments in real estate and finance, and overseas acquisitions, to become one of the most important players in the private sector. Chinese.

Xi Jinping wants Chinese private companies to fight alongside Communist Party
Starting in 2015, HNA embarked on a $ 40 billion shopping spree that included investments in Hilton (LDS) and German Bank (DB). At the end of 2017, HNA’s assets exceeded 1.2 trillion yuan ($ 186 billion).

But these acquisitions were based on large debt, which reached 707 billion yuan ($ 110 billion) in June 2019. The company’s woes were exacerbated by the coronavirus pandemic, and in February 2020, government officials in Hainan reported took control. At the request of the company, the authorities created a “task force” with other agencies to resolve HNA’s financial crisis..

HNA’s impending bankruptcy is also the latest sign of the demise of some of China’s most aggressive global negotiators. Anbang Insurance, another large conglomerate that has made huge overseas purchases, was seized by Chinese regulators in February 2018. It formerly owned Waldorf Astoria and Strategic Hotels & Resorts.

Beijing, meanwhile, is trying to tighten its grip on the country’s private sector. Much of the oversight of companies like HNA and Anbang began in 2017, when regulators began to take a closer look at their flashy transactions abroad, worried about liquidity risks.

In the years that followed, Chinese authorities took further steps to keep private businesses online. The ruling Chinese Communist Party, last September, for example, issued an exceptionally straightforward set of guidelines calling on its members to “educate private businessmen so that their [Xi’s] ideology of socialism. “
Recently, regulators have also looked for ways to crack down on the country’s huge tech industry. Ali Baba (BABA) was recently the target of an antitrust investigation and its financial subsidiary, Ant Group, has been tasked with overhauling its business.

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