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China’s HNA transfers airline management to Fangda Group -Breaking

by Mike Robinson

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© Reuters. FILEPHOTO: The commercial passenger Hainan Airlines Airbus is seen in Colomiers (near Toulouse), France on November 26, 2018. REUTERS/Regis Duvignau

BEIJING (Reuters), China’s HNA Group Co Ltd has announced that management of the core aviation business, which includes Hainan Airlines Holding Co Ltd and Liaoning Fangda Group Industrial Co Ltd was transferred to strategic investor Liaoning Fangda Group Industrial Co Ltd. The transfer took effect Wednesday.

Gu Gang was an HNA official who had been appointed by the government to solve the HNA’s decades-old debt problem. HNA announced that Gu Gang will not be serving as the Communist Party secretary of the conglomerate as progress has been made.

HNA embarked on a global $50 billion acquisition spree in the 2010s. This was largely driven by debt to create an empire that included stakes in diverse businesses like Deutsche Bank AG (NYSE) Hilton Worldwide Holdings Inc. (NYSE:)

However, regulators abroad and at home were very concerned by its spending. Concern grew about its debt and it decided to sell assets including Swissport airport services provider and Ingram Micro electronics distributor, in order to concentrate on tourism and airlines.

A petition was filed by creditors. The Hainan court put HNA in bankruptcy administration. In September Hainan Airlines announced that Fangda Group would be a strategic investor.

Fangda Group, a conglomerate that is involved in the carbon, steel, and pharmaceutical industries, has listed units like Fangda Carbon New Material Co Ltd., Fangda Special Steel Technology Co Ltd., and Northeastern Pharmaceutical Group Co Ltd.

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