HNA Group Co., Ltd., was a Chinese conglomerate headquartered in Haikou, Hainan, China. Founded in 2000, it was involved in numerous industries including aviation, real estate, financial services, tourism, logistics, and more.Company Overview of HNA Group Co., Ltd. . Bloomberg Business. Retrieved 11 February 2016. It was the owner of Hainan Airlines and a part owner of Grand China Air. In July 2017, HNA Group ranked No. 170 in 2017 Fortune Global 500 list with a revenue of $53.335 billion. It was one of the most active investment companies in the world, acquiring numerous assets under its name. In 2021, the corporation declared bankruptcy after debt restructuring efforts failed. On December 8, 2021, Liaoning Fangda Group Industrial acquired HNA's aviation division. Later, on December 24, Hainan Development Holdings Co., Ltd. acquired HNA's airport division, and marked the closing of the final chapter in the now defunct HNA Group.
History
In 1993, Chen Feng, Wang Jian, Tan Xiangdong, among others, created Hainan Airlines, with approval by the Hainan Provincial Government. Following a restructuring of the airline in 1997, they founded HNA Group Co. Ltd. in January 2000."HNA Group on the acquisition trail" . CAPA - Centre for Aviation. 11 August 2011. Retrieved 11 February 2016."Biography of Chen Feng" . The Wharton Global Alumni Forum: June 12–13, 2009 | Beijing. Retrieved 11 February 2016."HNA Chairman Chen Feng’s Growth Strategy: Go Global in the Downturn" . Knowledge@Wharton. 27 February 2013. Retrieved 11 February 2016. After this, the Group underwent great diversification, entering multiple industries such as tourism and logistics. It also significantly expanded its involvement with both national and international companies. These included several airlines, NH Hotel Group,Wen, Wang (19 November 2014). HNA Group buys 8.3% equity stake in NH Hotel Group of Spain . China Daily. Retrieved 11 February 2016. Uber,Carsten, Paul (11 January 2016). "Uber drives into China tourism industry with HNA Group tie-up" . Reuters. Retrieved 11 February 2016. and an office tower and a hotel in New York City. HNA Group had spent more than US$3 billion on foreign acquisitions. It had intended to be one of the top 50 companies in the world by 2030.Mellor, William and Wang, Jasmine (23 May 2014). For Hainan Airlines's Chen Feng, rise of resort in China provides lift for a new sky empire . The Washington Post. Retrieved 11 February 2016.
In October 2005, Soros Quantum Fund invested $25 million stake in HNA Group.You've Never Heard of HNA Group. Here's Why You Will . The Fortune. December 24, 2017
On February 18, 2016, HNA reached an agreement to acquire Ingram Micro Inc, a California-based technology distributor, for $6 billion, in the largest Chinese takeover of a US information technology company. HNA Group was then advised by China International Capital Corporation in the transaction.
In July 2017, HNA was targeted by the Central Government in a set of new measures that prohibit state-owned banks from lending money to Chinese private companies to curb their foreign investment activities and also over concerns about HNA's debt levels. Several banks associated with HNA's foreign investments halted new loans since, though some had already suspended their grants before the measures were signed into effect.
A year after investing, HNA Group was in talks to sell some or all of its 25% share in Hilton Grand Vacations, a timeshare business which had spun off from Hilton Worldwide Holdings the year before.
Overall debt in 2017 is said to have reached $94 billion at a borrowing cost of $5 billion for the full year. To ease the burden, the company disposed of assets worth $13 billion. The liquidity shortage also led the non-delivery of up to six Airbus A330 aircraft to be delivered to the group.
On 29 January 2021, HNA Group declared bankruptcy after debt restructuring efforts failed. The Hainan High Court criticized the company's corporate governance structure regarding management of its affiliates in the ruling. Hainan Airlines confirmed that it was operating as normal. Creditors were demanding the equivalent of US$187 billion in liabilities from the company. It is expected for the restructuring to take one year to complete. As part of the restructuring, most of the shares of HNA Group will be transferred to its creditors. In September 2021, founder and chairman Chen Feng and CEO Tan Xiangdong were arrested, while Chen's son Xiaofeng remained on HNA's board. The failed to restructuring makes HNA Group forced to split its assets and acquired by different buyers. In December 2021, HNA's aviation including its founding and flagship brand Hainan Airlines, was sold to Liaoning Fangda Group Industrial.
Employment numbers In 2017 the total number of employees in the Group was over 410,000 and the number of overseas employees was nearly 290,000.
Entities
HNA Group was composed of seven sub-groups: HNA Aviation, HNA Tourism, HNA Capital, HNA Holdings, HNA Modern Logistics, HNA Innovation Finance, and HNA Innovation Media & Entertainment.
HNA Aviation In December 2021, HNA Aviation was sold to Liaoning Fangda Group Industrial.
HNA Aviation is affiliated with multiple Chinese airlines. These include the following:Grand China Air ups stake in Hainan Airlines to 35% . www.ch-aviation.com. December 24, 2017Ge, Lena (9 December 2015). "HNA Group's Air Guilin Unveils Its Logo and Livery" . China Aviation Daily. Retrieved 11 February 2016.
Air Chang'an Beijing Capital Airlines Fuzhou Airlines Grand China Air GX Airlines Hainan Airlines Lucky Air Suparna Airlines Tianjin Airlines Urumqi Air West Air
The group also has stakes in some carriers based outside mainland China, including Hong Kong Airlines as well as Africa World Airlines, Azul Brazilian Airlines (23.7%),Horch, Dan (24 November 2015). "Brazilian Airline Azul Sells Stake to HNA Group of China" . The New York Times. Retrieved 11 February 2016. MyCargo Airlines,"HNA Group and Bravia Capital complete acquisition of ACT Airlines; rebranded as MyCargo Airlines" . CAPA - Centre for Aviation. 25 October 2011. Retrieved 11 February 2016. TAP Air Portugal (2.5%) and had a stake in Virgin Australia (13%).
On 18 January 2016, HNA Aviation formed the world's first alliance of low-cost carriers, U-FLY Alliance. While the founding members of the alliance—HK Express, Lucky Air, Urumqi Air, and West Air—are all affiliated with HNA Aviation, the alliance is also open to airlines not within HNA Group."HNA Group: four airlines form U-FLY Alliance, world's first LCC grouping, showing HNA consolidation" . CAPA - Centre for Aviation.22 January 2016. Retrieved 11 February 2016.
On 27 March 2019, HNA Aviation sold full stake of HK Express to Cathay Pacific for HK$4.93 billion. The transaction was expected to be completed by 31 December 2019, and by that time HK Express would become Cathay Pacific's wholly owned subsidiary.
Other entities HNA Tourism is involved in the tourism industry. Subgroup HNA Hospitality Group operates several resorts, business hotels, boutique hotels, and the Tangla hotel chain."HNA Group: HNA Capital" . HNA Group. Retrieved 11 February 2016
In 2015, the HNA Group purchased a failing hotel in Kerhonkson, New York, in upstate New York. The Hudson Valley Resort & Spa was featured on an October 2017 Planet Money podcast exploring why a Chinese multinational company would invest in a remote hotel in the United States.
HNA Capital deals with financial services and investment banking. It has over 30 member companies,"HNA Group: HNA Capital" . HNA Group. Retrieved 11 February 2016 such as Bohai Trust.
HNA Holdings is involved in real estate and the retailing industry."HNA Group: HNA Holdings" . HNA Group. Retrieved 11 February 2016. Subgroup HNA Airport Group operates 16 airports across China, including the airports in Haikou, Sanya, Weifang, Dongying, Yichang, Anqing, and Yingkou."HNA Holdings: Airport Management". HNA Group. Retrieved 11 February 2016
HNA Logistics is engaged with shipbuilding, marine cargo transport, air cargo, and other elements of logistics."HNA Group: HNA Logistics" . HNA Group. Retrieved 11 February 2016
HNA Innovation Finance is headquartered in Hong Kong; its main business covers bulk commodity trading, financial investment and consumer finance products and services.
HNA Innovation Media and Entertainment.
Subsidiaries HNA Industrial Group HNA Infrastructure Holding Group HNA Infrastructure Investment Group HNA Aviation (100%) HNA Aviation (Hong Kong) Holdings (100%) HNA Aviation (Hong Kong) Air Catering Holding (100%) gategroup HNA Innovation Finance Group Advanced Card Systems Holdings ()
Leadership
Chen Feng (co-founder and chairman of the board) Wang Jian (co-founder and chairman of the board), died on 3 July 2018 in an accident Tan Xiangdong or Adam Tan (co-founder and vice-chairman of the board and CEO) Li Xianhua (co-founder and vice-chairman of the board) Lu Ying (vice-chairman of the board) Chen Wenli (co-founder and member of the board of directors) Zhang Ling (member of the board of directors and CEO) Chen Xiaofeng (member of the board), son of Chen Feng
Investments and acquisitions Equity investments
Grand China Air (23.11%) as second largest shareholder Haikou Meilan International Airport Hainan Airlines (4.88% directly; additional 4.25% via subsidiary Changjiang Leasing) as second largest shareholder; Grand China Air is the largest shareholder of Hainan Airlines. HNA Infrastructure AID Partners Capital Holdings (via HNA Group Holding and subscription of convertible bond). HNA Technology (20.76% via HNA Technology Group) Ingram Micro (100%), it was divested in 2020 for US$7.2 billion. Deutsche Bank (previously 9.90% as the largest shareholder as of April 2017, jointly owned by subsidiaries BL Capital Holdings and HNA Innovation Finance Group via C-QUADRAT Special Situations Dedicated Fund; stake reduced to 8.8% as of February 16, 2018 and further reduced to 6.3% as of February 16, 2019) NH Hotel Group (29.34% as of 27 February 2017)
Acquisitions In 2006, the HNA Group acquired two airlines in Hong Kong, Hong Kong Airlines and Hong Kong Express Airways.Washington Post: "For Hainan Airlines’ Chen Feng, rise of resort in China provides lift for a new sky empire" By William Mellor and Jasmine Wang May 23, 2014 In 2011, the HNA Group paid US$260 million for a foreclosure-threatened Manhattan office tower at 1180 Sixth AvenueNew York Times: "Chinese Investors Pursue U.S. Property Deals" By JULIE CRESWELL June 25, 2013 and purchased the Cassa Hotel New York for US$126 million.Wall Street Journal: "Massey Knakal Plays Role Refinancing Midtown Hotel" by Craig Karmin March 2, 2014 In May 2011, the HNA Group purchased a 20% interest in the NH Hotel Group for €431.6 million (US$610.7 million)Hotel News Now: "HNA Group acquires 20% stake in NH Hoteles" 17 May 2011 and in November 2014, HNA increased its ownership to 29.5%.Reuters: "China's HNA buys 8.33 pct of Spain's NH Hoteles from Italy's Intesa" November 11, 2014 In August 2011, the HNA Group purchased GE Seaco via its Bohai Leasing affiliate for US$1.05 billion,Bloomberg: "GE Agrees to $1.05 Billion Sale of SeaCo to HNA, Bravia" by Zachary R. Mider, Rachel Layne and Natalie Doss August 1, 2011 the world's 5th largest marine container leasing company.Seaco Global website: "HNA Group and Bravia Capital to Acquire GE SeaCo" January 08, 2011 In October 2012, the HNA Group completed its acquisition of a 48 percent stake in Aigle Azur, France's second largest airline, for €52 million.The airline ceased operations in 2019.Wall Street Journal: "China's HNA Group to Buy Stake in France's Aigle Azur" by DINNY MCMAHON October 22, 2012