(BEIJING/HONG KONG) - Just as HNA Group is selling billions of dollars in assets to stay afloat, the unexpected death of group chairman Wang Jian while on a tour in France could exacerbate the debt-laden Chinese conglomerate's woes in the short term.facing turmoil.
Wang Jian's sudden death coincided with HNA's reorganization.Bloomberg quoted Liu Feng, secretary-general of the Research Center for Free Trade Ports with Chinese Characteristics at Hainan Normal University, as saying that Wang Jian's death will definitely have a short-term impact on HNA's business development.
But he sees limited long-term impact on the group.
Senior Chinese officials have agreed to help HNA raise funds, people familiar with the matter said last month.The group's profit last year was not enough to cover interest expenses.
According to HNA's latest ownership structure information, Wang Jian's status in HNA Group is second only to the chairman of the board of directors Chen Feng. He holds about 15% of HNA Group's shares and is one of the largest shareholders of the group.HNA said last year that group executives planned to donate all their shares to the Cihang Public Welfare Foundation, which holds a majority stake in HNA, after resigning or passing away. The foundation is expected to eventually hold 100% of the shares of HNA Group.
Wang Jian played an important role in the expansion and contraction of the HNA empire.HNA Group, once the poster child for China's overseas acquisition spree, has since turned around and has disposed of more than 14 billion yuan (US$, the same below, S$19 billion) in assets this year, including a multi-billion-dollar stake in Hilton Worldwide.shares.
According to people familiar with the matter, Wang Jian has led the expansion of HNA in recent years. During this period, the group spent more than 40 billion yuan to acquire assets and became the largest shareholder of international giants such as Deutsche Bank and Hilton.
Wang Jian set HNA a goal of becoming a top Fortune 500 company, saying it was the most effective way to boost the company's image, one of the people said.Last year, HNA ranked 170th, rising 183 steps.
The group's financial woes began to emerge in the middle of last year after HNA's takeover spree, when the Chinese government began scrutinizing acquirers including HNA, Dalian Wanda Group and Anbang Insurance Group.HNA's interest expense topped the list of non-financial companies in Asia in its interim report, a trend that has continued throughout 2017, as borrowing costs soared.HNA’s latest annual report shows the group’s debt exceeds 90 billion yuan.
The South China Morning Post quoted analysts expecting HNA to accelerate the sale of overseas assets.
The newspaper also quoted anonymous sources as saying that HNA plans to use a luxury house in Hong Kong's Victoria Peak as collateral for the loan.Based on selling prices of neighboring homes, the property could be worth $70 million.
According to the report, Chen Feng, the co-founder and chairman of the board of directors of HNA Group, usually lives here when he is in Hong Kong.
