Scaramucci's Long-Delayed Sale to HNA Said to Inch Forward

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(Bloomberg) -- A U.S. national security review of Anthony Scaramucci’s agreement to sell his stake in SkyBridge Capital to China’s HNA Group Co. is finally inching forward after months of delays over questions about the firm’s ownership, according to a person familiar with the matter.

The panel that reviews foreign takeovers of U.S. businesses has accepted the sale for review, said the person, who declined to be identified because the matter is confidential. That starts a maximum 75-day clock for U.S. officials to decide whether to approve or oppose the deal, though the companies can restart the process.

The review of HNA’s acquisition of SkyBridge is beginning just as HNA is unloading billions of dollars in assets as the once-voracious acquirer looks to cut its massive debt. The purchase was aimed at giving HNA a potential foothold in financial services in the U.S.

Scaramucci reached the agreement to sell his ownership in SkyBridge to the Chinese conglomerate in January 2017 as he was shedding business conflicts to take a job in the Trump administration. He was hired last summer as White House communications director and was fired after 10 days.

Scaramucci Comeback?

Out of a job, Scaramucci has said the SkyBridge sale was proceeding and that he was confident it would close. But the deal has been stuck in limbo before the Committee on Foreign Investment in the U.S., which reviews foreign acquisitions of domestic businesses for security risks. The panel had put the review on hold until HNA addressed questions about its ownership, Bloomberg reported earlier this month.

Scaramucci didn’t return emails Friday seeking comment for this story. A SkyBridge representative declined to comment.

In an interview with Bloomberg TV in Davos, Switzerland, last month, Scaramucci said that if the sale goes through he would like to retain some equity in the firm and “be active in terms of the firm’s growth and prosperity.”

Scaramucci also said he saw no reason the deal shouldn’t go through. “I don’t think selling SkyBridge to HNA is a national security issue for the United States, but if it is I’d like to find out why it is, and someone will have to articulate that to me,” he said.

Regulatory Timetable

Companies seeking clearance from CFIUS typically have preliminary discussions with the panel about their deals before the review formally starts. CFIUS reviews adhere to strict timelines, with an initial 30-day period followed by a 45-day investigation if more time is needed. At the end of the review, CFIUS can approve the transaction, impose changes to protect national security, or recommend that the president block it.

It’s routine for deals to go the full 75 days and often require refiling with the panel to allow more time. That’s especially true for Chinese investors, who face heightened scrutiny over takeovers. About half a dozen Chinese deals have fallen apart during the Trump administration because of concerns raised by CFIUS, which is led by the Treasury Department and includes officials from the Pentagon, Justice Department and Homeland Security Department.

Among those was HNA’s investment in in-flight entertainment and internet-services provider Global Eagle Entertainment Inc. HNA was accused in a lawsuit in December of giving false and inconsistent information to CFIUS about its ownership structure in another deal. HNA said the lawsuit was baseless. CFIUS doesn’t disclose or comment on its reviews.

After spending tens of billions of dollars investing in big stakes in Deutsche Bank AG and skyscrapers in New York, the conglomerate that once symbolized China’s insatiable appetite for global assets is reversing course after the government soured on overseas acquisitions and debts piled up beyond the company’s means. The group is said to have told creditors it could have a liquidity shortfall of at least 15 billion yuan ($2.4 billion) this quarter and that it’s targeting about 100 billion yuan in asset sales during the first half.

©2018 Bloomberg L.P.

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