HNA Group held preliminary talks to sell its core airline assets to one of China’s top state-run carriers, people familiar with the matter said, a sign little has been off the table as the sprawling conglomerate seeks to pay down its hefty debt load.
The talks, which haven’t been previously reported, started late last year, the people said, asking not to be identified discussing a private matter. The state-run parent of Air China held at least two high-level meetings to buy HNA assets including flagship Hainan Airlines Holding, they said. But discussions have cooled in the past few months and it’s unclear whether they will progress because of numerous hurdles, according to the people.
HNA, which declined to comment on Wednesday, subsequently denied any such discussions occurred.
“Hainan Airlines is not for sale, full stop, and never was, and even the general conversations in question about other airline assets under Hainan Airlines Holding took place months ago,” HNA said in a statement to Bloomberg.
The company, based in Hainan island off China’s southern coast, agreed to sell more than $20 billion in assets this year and more than double that remains on the block, according to a Bloomberg tally.
The Air China side made initial contact late last year after getting an endorsement from the industry regulator, Civil Aviation Administration of China, the people said. Discussions involved buying airline assets that went beyond the listed Hainan Airlines holding company, they said.
Air China said it’s not aware of any such discussions and that it has nothing to disclose regarding the matter. Representatives at the aviation regulator couldn’t immediately comment.
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