BEIJING, China – Chinese group HNA, an indirect shareholder of Portuguese airline TAP, announced on Wednesday that it has sold two residential lots in Hong Kong for US$2 billion at a time when it faces serious liquidity problems.
Both lots, sold to Henderson Land real estate, are located on a site once occupied by Hong Kong airport.
In November 2016, HNA acquired four buildings in that area, for HK$27.20 billion. The two lots sold equaled 17 per cent of the total land area, according to the company in a statement sent to the Hong Kong Stock Exchange.
The sale is part of the group’s plan to sell its own assets and its subsidiaries to address a serious liquidity crisis.
Some Chinese banks have already denounced the difficulties of the group’s subsidiaries in paying off their debts, after HNA has invested a total of 33 billion euros across borders in recent years.
In Portugal, the company indirectly owns about 20 per cent of TAP’s capital, through a 13 per cent stake in Azul (a company owned by David Neelman of Atlantic Gateway) and a 7 per cent stake in Atlantic Gateway.
One of its subsidiaries, Capital Airlines, inaugurated this year the first direct flight between China and Portugal.
The group also has significant holdings in companies such as Hilton Hotels, Swissport or Deutsche Bank.
Last month it announced that it has hired New York investment banks JP Morgan and Benedetto Gartland to sell their 29.3 per cent stake in the Spanish hotel group NH.
HNA is one of the main targets of the Chinese authorities’ warnings of “irrational investments” abroad, which could pose risks to the Chinese financial system.
At the end of November 2017, the group’s debts amounted to RMB637.5 billion (81.9 billion euros). In the same month, the group issued bonds with 363 days in the debt market, with a high rate of 8.87 per cent.
At the end of January, the rating agency Standard & Poor’s downgraded the group’s debt rating from B + to B on the “junk” level.
HNA was founded in 1993 and is headquartered in Haikou, capital of Hainan province.
