US$11b HNA property assets up for sale

Business | Reuters 10 Oct 2018

Chinese conglomerate HNA Group has put up for sale property assets worth at least US$11 billion (HK$86.18 billion), according to documents seen by , accelerating a push to cut its large debt and restructure.

Two sets of documents listed more than 80 assets that HNA has either put up for sale or intends to sell, including hotels, commercial and residential buildings. They are mostly within China, with the bulk of them located in Hainan Island, where HNA is headquartered.

The documents were sent to prospective investors in August, said sources.

Under pressure from Beijing, the aviation-to-hotels conglomerate has in 2018 sold real estate, stakes in overseas companies and aviation-related assets after a US$50 billion acquisition spree in recent years.

Since January, HNA has sold or agreed to sell over US$20 billion worth of assets, including real estate in Sydney, New York and Hong Kong, according to calculations and media reports.

"We are strategically exiting some areas but it's not a fire sale," said a company source familiar with the group's plans.

It was not immediately clear if some of the assets listed in the two sets of documents have been already sold. An HNA spokeswoman declined to comment.

HNA's total debt stood at 657.41 billion yuan (HK$743.94 billion) at the end of the first half, down 10.7 percent from end-2017. Despite the decrease, the group's total debt to EBITDA stood at 21.36 times at the end of the first half.

In one set of the documents, HNA listed 24 assets in China and 11 overseas, it estimated the total value of 26 assets listed in this set of documents as US$10.5 billion but didn't give the estimated valuations of the remaining assets.

In a separate set of documents sent to another potential investor, HNA listed 57 domestic property assets as "planned for sale", 10 of which also appear in the first set of documents.

The assets listed in the second set of documents include hotels in Hainan, Beijing and Shanghai, as well as residential buildings in Hainan, Tianjin and Tangshan in northern China's Hebei province, which did not give the estimated valuations.

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