HNA Puts Billions More on the Block in New Sales Push

(Bloomberg) -- HNA Group Co. is putting more of its aviation and property assets on the block, marketing more than $40 billion of domestic and international holdings as the Chinese conglomerate races to reduce its debt load.

Updated lists sent to potential buyers and seen by Bloomberg News included more than 90 assets in China, the U.S. and U.K. Among the additions: The airline leasing business purchased from CIT Group Inc. for more than $10 billion, and a 459-hectare artificial island project in Hainan, southern China, valued by HNA at 21.2 billion yuan ($3.1 billion).

HNA Puts Billions More on the Block in New Sales Push

HNA, which started in 1989 as an airline based in Hainan island, expanded rapidly through acquisitions around the world before the government started reining deals in last year amid concern that debt levels were unsustainable. Under rising pressure to shed holdings, the group has increasingly turned to marketing aviation-related assets, part of its core business, and has even resorted to using air tickets in lieu of cash to repay obligations.

The conglomerate didn’t immediately respond to phone calls seeking comment.

HNA is seeking buyers for all its overseas aviation and logistic holdings -- purchased with more than $33 billion since 2010 -- a person familiar with the group’s sales pitch said. The firm’s management hasn’t decided if it will attempt to sell those assets as a single package, or negotiate with bidders separately on each one, the person said, asking not to be named because the information is private.

Top aviation and logistics assets for sale:

CompanyStakePurchase Price Listed by HNA
CIT Aircraft Leasing 100%$10 billion
Avolon Holdings Ltd.70%$7.6 billion for entire company
Ingram Micro Inc100%$6 billion
Dufry AG16.2%$1.4 billion
CWT Pte100%$1 billion

Top properties for sale:

Property CityPrice Valued by HNA
Pearl IslandHainan21.1 billion yuan ($3 billion)
HNA PlazaShanghai4.92 billion yuan ($708 million)
Tianjin Center complexTianjin3.5 billion yuan ($503 million)
Sanya Sheraton HotelSanya3.09 billion yuan ($445 billion)
245 Park AveNew York$2.21 billion
181 West Madison StChicago$359 million
30 S ColonnadeLondon235 million pounds ($299 million)
17 Columbus CourtyardLondon131 million pounds ($166 million)

As one of the world’s biggest asset sales sprees widens, estimates of the total vary widely, partly depending on which already agreed transactions are included as done deals and which assets overlap.

While HNA Group agreed to pay $10 billion for the CIT leasing business, the transaction was undertaken with HNA’s Avolon Holdings and another unit, which could affect the value of either asset if sold separately. Both companies are included on HNA’s list of assets for sale.

Though one of the lists described CIT’s aircraft leasing business as separate from Avolon, Sam Moore, a spokesperson for Avolon, said that it’s now fully integrated into the company. Avolon is 70 percent owned by Bohai Leasing Co., whose majority shareholder is HNA, according to Moore.

The company has already agreed to sell more than $22 billion of assets this year, according to a Bloomberg tally, including stakes in Hilton Worldwide Holdings Inc. Chairman Chen Feng told China’s Caijing media earlier this month the company has sold some 300 billion yuan ($43 billion) of assets in 2018.

©2018 Bloomberg L.P.