Temasek and others to buy Hainan Airlines stakes
June 19, 2018 Category China News Round-up, Weekly
Hainan Airlines Holding plans to raise as much as CNY7 billion by selling shares to a group of investors, including an arm of Singapore state investment company Temasek Holdings, as part of a restructuring. The Hainan-based carrier is selling up to 20% of its Shanghai-listed shares to 10 investors. HNA said it plans to use the funds to expand its operations by buying aircraft and support six other projects, such as pilot training, engine maintenance and training facilities.
Temasek Fullerton Alpha will buy CNY700 million worth of the shares, or 10% of the total. “The fresh funds are aimed at helping the airline enhance its competitiveness,” said He Yan, Fund Manager with Shanghai Shiva Investment. “It will also help the company reduce debt.” Hainan Airlines’ debt to asset ratio hit 62.52% at the end of 2017, 8.34 percentage points higher than the previous year. It was the worst performer among China’s eight listed carriers in terms of return on equity in 2017. After the transactions, the controlling shareholder will become Hainan Province Cihang Foundation, which is connected to HNA Group, replacing Hainan’s State-owned Assets Supervision and Administration Commission (SASAC).
China’s fourth-largest airline, whose A-shares have been suspended from trading since early January, announced that the share placement will be subject to shareholder and regulatory approval. HNA has been one of China’s most active global asset buyers in recent years, purchasing equities and assets in companies – including hotel group Hilton Worldwide Holdings, airline catering firm Gategroup, aviation servicing company Swissport, and Deutsche Bank – but it has been offloading assets to meet debt obligations.
Meanwhile, HNA Group is closing down a Hong Kong-based unit and merging its assets into the group’s logistics arm. The company confirmed that operations at HNA Innovation Finance – set up only in March 2017 – will be integrated into HNA Logistics. Its unmaking is part of the group’s downsizing effort to trim its debt amid China’s crackdown on risky financing. Through the HNA Innovation Finance vehicle, the group bought a 51% stake in Swiss commodities trader Glencore’s oil products storage and logistics assets and Singaporean warehouse and delivery operator CWT.
- KURT VANDEPUTTE (UMICORE) APPOINTED CHAIRMAN OF THE BOARD OF THE FLANDERS-CHINA CHAMBER OF COMMERCE (FCCC)
- Webinar: “Knowing Your Chinese Partner” – May 26, 2021, 10 am – 12 am
- EMA starts rolling review of CoronaVac, WHO approves Sinopharm vaccine for emergency use
- The Global Times warns not to politicize the Comprehensive Agreement on Investment (CAI)
- Hainan to become biggest duty-free market in the world