(Bloomberg, Hong Kong) HNA Group Chairman Chen Feng promoted two family members to key positions in the group this month.lost control of the struggling conglomerate.
Chen Feng, Chairman of HNA Group
As of the end of December last year, HNA Group had more than US$85 billion in debt.Chen Feng, who is seeking to persuade banks, investors and the government to restore confidence in HNA Group, has promoted his son Chen Xiaofeng to the group's deputy chief executive, who will be in charge of the group's international business, according to people familiar with the matter.Earlier this month, Chen Feng appointed his nephew, who is in his 30s, as the group's chief investment officer and executive chairman of an investment subsidiary.
Chen Xiaofeng was appointed as Wang Jian's assistant in June this year before becoming the group's deputy chief executive; before that, he was the president of HNA North America.This month, he and his cousin Chao Chen joined the board of Swissport Group.HNA Group acquired the aviation ground handling service provider in 2015.Tan Xiangdong remains the CEO of HNA Group.
He is also the deputy secretary-general of the charitable foundation (the major shareholder of HNA Group) and the president of the investment company Pacific American Investment Company.According to the introduction, he received a bachelor's degree in industrial engineering from the University of Washington and completed the Harvard Business School's Chinese corporate executive training program.
Earlier report: HNA rarely admits to facing financing difficulties
In January this year, China's HNA Group, which was plagued by unfavorable rumors, rarely admitted that it was facing financing difficulties. However, in an exclusive interview with international media, Chen Feng, the chairman of the board of directors of the group, also gave a boost to the outside world, indicating that HNA can solve the cash shortage problem and will continue to obtain bank and financial resources this year.Support from other financial institutions.
According to an exclusive interview conducted by Reuters with Chen Feng, Chen Feng said frankly that HNA Group has liquidity problems because we have carried out a large number of mergers and acquisitions; China’s economy has shifted from rapid growth to moderate growth, which has impacted HNA’s access to new financing.
Chen Feng pointed out that the Fed's interest rate hike and China's deleveraging have caused many Chinese companies to encounter liquidity shortages at the end of the year, but he said that we believe we will be able to overcome these difficulties and continue to develop sustainably, healthily and stably.
This is a rare acknowledgment by HNA executives that the group is facing financing difficulties.In recent weeks, Chinese bankers have privately and publicly expressed concern about HNA, which is overdue on some of its debt, including some aircraft lease payments, and a surge in debt that has pushed the group's short-term funding costs to new highs.
HNA's leverage levels have long alarmed some analysts, with global rating agency Standard & Poor's downgrading the company's credit rating in November.
HNA Chief Executive Tan Xiangdong said in November that the company sold some real estate and other assets to improve liquidity and comply with national policies.The group has raised money in recent weeks by issuing high-cost short-term bonds and borrowing further against shares.
During an interview at HNA's headquarters office in Haikou, China, Chen Feng said that after several years of extraordinary development, HNA is currently focusing on business integration, creating synergies between domestic and foreign resources, and improving group management.
He said that HNA's long-term goal has not changed, it is still to become a world-class enterprise, and 2018 is our year of increasing efficiency.
HNA Group announced its new shareholding structure in July last year, and several countries have since launched regulatory investigations into it, affecting the group's financing problems.While authorities in Germany, Ireland and the UK gave it the green light, the group suffered setbacks in Switzerland and New Zealand.
Since last year, HNA has been hit by unfavorable rumors, including Guo Wengui, a fugitive wealthy businessman who broke the news overseas that the group's behind-the-scenes controller is related to Wang Qishan, former member of the Standing Committee of the Politburo of the Communist Party of China and the Central Commission for Discipline Inspection.
During the interview, Chen Feng also admitted that the groundless slanderous rumors about the group's connection with a family of a senior CCP official aggravated the outside world's concerns about the group's ownership and (had) a certain impact on our image and reputation, but these problems are slowlysolve.He also said that HNA is facing inexperienced problems from a Chinese enterprise to the world, and it is unrealistic to expect HNA Group to fully control the situation at once.Chen Feng said that it will take time to digest the business acquired and integrated by the group, and we are taking it step by step.
