Troubled conglomerate HNA’s creditors meet for the first time

Troubled conglomerate HNA’s creditors meet for the first time | Insurance Business Asia

Troubled conglomerate HNA’s creditors meet for the first time

Creditors of bankrupt Chinese conglomerate HNA Group held their first official meeting on Friday, June 04, as part of the debt-laden group’s restructuring process.

According to a report by Nikkei Asia, the restructuring may take several months or years more, but the meeting is a key step that will be felt by companies in Asia, Europe and the US. Among HNA’s purchases were the Radisson hotel chain, aviation services firm Swissport Group, and various stakes in airlines and airports. HNA also had a joint venture with Shin Kong Group, known as Shin Kong-HNA Life Insurance, as well as stakes in Bohai Life Insurance and Sinosafe General Insurance.

HNA, along with compatriots Dalian Wanda Group, Anbang Insurance and Fosun International, made international headlines for their global shopping sprees, mostly fuelled by debt. The Chinese government put a stop to their aggressive dealmaking as it sought to rein in systemic financial risk.

In March, the Hainan Province High People's Court ruled to consider HNA and its 320 affiliates as a single entity, after the court’s discovery of the group’s chaotic structure, with many companies independent in name only.

HNA’s filing for bankruptcy in January unravelled a host of irregularities, with the full magnitude yet to be determined by the courts. Fourteen HNA affiliates listed on the stock exchanges had total losses of RMB95.72 billion (SG$19.82 billion) in 2020, due to write-offs of intragroup debts and various related impairments and provisions.

One of the meeting’s attendees told Reuters that an HNA bankruptcy administrator revealed 67,400 creditors had filed RMB1.2 trillion in claims as part of the restructuring case. Around RMB405 billion has been verified, while RMB353 billion was rejected, with the rest still being screened.