HNA Group has made significant progress in risk resolution.
The reorganization of HNA Group has been completed for more than four months, and the relevant working group of HNA Group has basically completed the reorganization of HNA Group after more than four months.
This also means that the bankruptcy reorganization case of HNA Group, as the largest bankruptcy reorganization case in China, officially declares that the dust of risk resolution has basically been settled.
Industry insiders believe that after the implementation of the reorganization plan, the relevant risks of HNA Group can be resolved, all kinds of creditor’s rights will be properly paid off according to law, the company’s compliance problems will be properly solved, and the company is expected to unload the burden and realize light loading and sound development.
completion of risk disposal of bankruptcy reorganization case of HNA Group
On April 24, the official wechat of HNA Group announced that since October 31, 2021, Hainan Higher People’s court ruled to approve the reorganization plan, under the supervision of the court and through public selection in accordance with regulations, the consortium composed of CITIC Trust Co., Ltd. and Everbright Xinglong Trust Co., Ltd. has been determined as the trust trustee. Up to now, the special service trust for bankruptcy reorganization of HNA Group has been established according to law. Meanwhile, 321 substantive merger and reorganization plans including HNA Group have been implemented and confirmed by the court.
So far, the four reorganization plans of the relevant bankruptcy reorganization case of HNA Group have been implemented and ruled by the court.
HNA Group said that since the establishment of the joint working group on February 29, 2020, the risk disposal work of HNA Group has been basically completed after more than two years. We sincerely thank all parties for their support for the risk disposal work of HNA Group.
“The completion of the reorganization plan means a new starting point for HNA. I wish that under the guidance of the trust trustee, HNA will continue to overcome difficulties and improve its operation in the new journey, so as to repay the trust beneficiaries and society with solid performance.” There was a message from HNA staff.
In fact, HNA Group had a liquidity crisis at the end of 2017, and the enterprise failed to completely resolve the risk, which exacerbated the liquidity risk.
On February 29, 2020, Hainan Province established a joint working group of HNA Group together with relevant departments in accordance with regulations to fully assist and comprehensively promote the risk disposal of HNA Group.
On January 29, 2021, HNA Group issued a statement saying that the relevant creditors applied to the court for bankruptcy reorganization because they could not pay off their due debts. On October 31, 2021, the reorganization plan of HNA Group and its related enterprises was ruled by the higher people’s Court of Hainan Province.
How big is the risk hole of HNA? Due to the debt crisis of HNA Group, the disclosure of relevant annual reports has been delayed for many years. At present, the data that can be queried is limited to the first half of 2019.
As of the first half of 2019, HNA Group’s total assets were 980.6 billion yuan, falling below the trillion mark year-on-year; The total liabilities are 706.73 billion yuan, the net assets are 273.9 billion yuan, and the asset liability ratio is 72.07%.
In the first half of 2019, HNA Group achieved an operating revenue of 266.46 billion yuan, a year-on-year decrease of 7%, and its net profit turned from profit to loss, with a loss of 3.52 billion yuan, a year-on-year decrease of 184%.
It is understood that since HNA Group entered the bankruptcy proceedings, it has accepted a total of 2 trillion creditor’s rights declaration and finally confirmed 1.1 trillion creditor’s rights.
review the restructuring process of HNA Group
Benefiting from the era of reform and opening up and the establishment of Hainan Province as a special economic zone, HNA was once a leading enterprise in Hainan. Why did it become the protagonist of China’s largest bankruptcy reorganization case? The reason is that the blind expansion of “buying” in the early stage fell into a debt crisis, coupled with the impact of covid-19 pneumonia, resulting in the fruitless “self rescue”.
review the process of bankruptcy and reorganization of HNA Group:
In 2017, HNA Group had a liquidity crisis, with a total debt of 750 billion yuan and an asset liability ratio of 70%. With the advent of liquidity crisis, HNA Group has opened the road of “self rescue” by continuously selling assets.
In 2018, HNA Group completed asset sales of nearly 300 billion yuan, mainly focusing on non aviation assets and businesses such as finance and real estate. In July 2018, Wang Jian, the former chairman of HNA Group, died suddenly, which further plunged HNA into a precarious situation. Chen Feng, the founder who had faded out of the business line, returned to the front line of HNA Group to take the helm as the chairman of HNA Group.
In December 2019, Chen Feng, then chairman of HNA Group, publicly said that HNA was facing a cash flow shortage and delayed the salary payment of some employees in 2019, promising to solve the crisis in 2020. However, in 2020, the sudden covid-19 epidemic has exacerbated the cash flow crisis of HNA Group.
On February 29, 2020, Hainan Provincial People’s government and relevant departments jointly established a “joint working group of Hainan HNA Group” to comprehensively promote risk disposal. In the case that HNA’s own hematopoietic capacity is seriously insufficient, the bankruptcy reorganization of HNA Group is an inevitable choice.
On January 29, 2021, HNA Group issued an announcement and received the notice issued by Hainan Higher People’s court. The relevant creditors applied to the court for bankruptcy reorganization of HNA Group because HNA Group could not pay off its due debts.
On February 10, 2021, Hainan Higher People’s court ruled to accept the bankruptcy reorganization cases of HNA Group Co., Ltd. and related enterprises according to law. On March 13, 2021, the higher people’s Court of Hainan Province ruled to accept the substantive merger and reorganization cases of 321 companies, including HNA Group Co., Ltd.
On September 24, 2021, HNA Group announced that after receiving the notice from Hainan public security organ, Chen Feng, chairman of HNA Group and Tan Xiangdong, CEO of HNA Group were taken compulsory measures according to law because they were suspected of illegal crimes. The bankruptcy reorganization of HNA Group was carried out smoothly according to law, and its production and operation were not affected.
On October 25, 2021, HNA Group announced that four plans (drafts), including HNA Group and three listed companies, had been voted on. On October 31, 2021, Hainan Provincial People’s court ruled that Hainan Airlines Group and its related enterprises entered the four-month reorganization plan.
Until April 24, 2022, HNA Group announced that all four reorganization plans of HNA related bankruptcy reorganization cases had been implemented and ruled by the court, and the risk disposal of HNA Group was basically completed.
Nirvana rebirth, HNA return
With the smooth implementation of the restructuring plan and the resolution of basic risks, HNA is reborn from nirvana. What will it face next?
Previously, Gu Gang, head of the joint working group of Hainan HNA Group, said that on the one hand, after the reorganization, the old shareholder team and Cihang foundation cleared all their rights and interests in HNA Group and member enterprises and no longer owned relevant equity. After the reorganization is completed, the equity of the old shareholder team will be cleared in accordance with the law, which is not only the legal requirement of legalized and market-oriented bankruptcy reorganization, but also the basic responsibility that shareholders must bear, but also the inevitable consequence of the savage growth of private enterprises.
On the other hand, after the reorganization of HNA, it will be divided into four sectors to operate independently and return to the main business for healthy development. If the bankruptcy reorganization is successfully completed, HNA will split the reorganization into four completely independent operating sectors – aviation, airport, finance, commerce and other sectors. Each free new actual controller and shareholder will lead the way and be completely independent of each other to ensure that each sector returns to its main business and develops healthily.
Previously, Hainan Airlines Holding Co.Ltd(600221) said in the announcement of the reorganization plan that after the implementation of the reorganization plan, all kinds of creditor’s rights will be properly paid off according to law, the compliance problems of listed companies will be properly solved, and the listed companies will unload their burdens and realize light and sound development. At the same time, by reorganizing and introducing powerful high-quality strategic investors, the 11 companies will seize the national strategic opportunity of the construction of Hainan free trade port, continue to consolidate and carry forward the position advantages of China’s fourth largest aviation group, and build HNA holdings into a super carrier of double hubs of international regional aviation center of free trade port.
Industry analysts believe that HNA Group and its related enterprises have successfully implemented and completed the reorganization. The reorganization plan is conducive to improving the company’s asset liability structure, reducing or eliminating the historical burden and improving the company’s profitability.
