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HNA considers asset sales, signals reversal of buying spree

11/30/2017| 12:06:19 PM| 中文

HNA is considering selling assets, signaling the acquisitive company is caving in to government pressure by reversing a shopping spree that cost tens of billions of dollars and strained its finances.

Assets that could be sold include buildings and holdings in industries where investment is being restricted by the Chinese government, HNA Co. Chief Executive Officer Adam Tan told a media gathering during a forum hosted by Caijing Magazine in Beijing on Tuesday. Disposals would help HNA -- the top shareholder of Deutsche Bank AG and Hilton Worldwide Holdings Inc. -- improve its liquidity and cash flow, he said.

“If some sectors are now restricted by government, I will consider selling assets I bought in these sectors," Tan said. "We will not invest in anything the government does not support."

The comments help illustrate how HNA, which in recent years emerged as one of China’s top acquirers of foreign assets, is falling in line with President Xi Jinping’s campaign to stem capital outflows. Asset disposals could also help the group pay off debt and reduce its interest expenses, which have climbed to levels higher than at any other non-financial company outside of the U.S and Brazil.

Tan, who didn’t specify which assets HNA would sell, said the company will moderate its pace of overseas investments to conform with Chinese government policies. In terms of real estate, HNA is disposing of buildings in New York and Sydney, while the company is seeking to cash out of properties in Hong Kong through real-estate investment trusts, he said.

HNA is also planning an initial public offering of Zurich-based Gategroup Holding AG next year, Tan said. The aviation services and logistics company and HNA are considering the SIX Swiss Exchange for the listing, Gategroup said hours later.

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