HNA once wanted to rule the world. Bankruptcy Now Faced

HNA once wanted to rule the world. Bankruptcy Now Faced

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The creditors of the company in Hainan have asked a Chinese court to approve plans for the bankruptcy, HNA said in a statement on Friday. The creditors said the conglomerate could not pay off its debt.

The filing of bankruptcy means a dramatic fall for one of the country’s most prominent companies. HNA started life as an airline, but has grown rapidly through investments in real estate and finance, and overseas acquisitions, to become one of the major players in China’s private sector.

Xi Jinping wants China's private companies to fight with the Communist Party
As of 2015, HNA has launched a $ 40 billion investment session that includes investments Hilton (HLT) and Deutsche Bank (DB). By the end of 2017, HNA’s assets amounted to 1.2 billion yuan ($ 186 billion).

But the acquisitions are built on a lot of debt, which by June 2019 amounted to 707 billion yuan ($ 110 billion). The company’s misery was exacerbated by the coronavirus pandemic, and in February 2020, government officials in Hainan took control. At the request of the company, authorities set up a “working group” with other agencies in an effort to resolve HNA’s financial crisis.

HNA’s looming bankruptcy is also the latest sign of the downfall of some of China’s most aggressive global traders. The Chinese regulators seized Anbang Insurance, another large conglomerate that made foreign purchases, in February 2018. It was once Waldorf Astoria and Strategic Hotels & Resorts.

Beijing, meanwhile, has been trying to tighten its grip on the country’s private sector. Many of the investigations into companies like HNA and Anbang started in 2017 when regulators took a closer look at their flashy overseas transactions and were concerned about liquidity risks.

In the years since, Chinese officials have taken other steps to keep private companies in line. For example, in September last year, the ruling Chinese Communist Party published an extraordinarily honest set of guidelines calling on its members to train private businessmen to arm their minds. [Xi’s] socialism ideology. ‘
Regulators have also recently been looking for ways to curb the country’s massive technology industry. Alibaba (BABY) was recently the target of an antitrust investigation and its financial subsidiary, Ant Group, has been asked to refurbish its business.

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