Chinese banks lending to HNA Group again

Debt-laden conglomerate made up $2B cash shortfall in Q1

TRD New York /
Mar.March 26, 2018 09:40 AM

From left: 1180 Sixth Avenue, Chen Feng and 245 Park

HNA Group navigated choppy waters during the first quarter of the year, making it through a cash shortfall of more than $2 billion.

The conglomerate’s biggest lifeline came from Chinese banks, which resumed lending to the company in February. Its bonds rallied and last week the company settled about $475 million in outstanding fuel bills.

“The cash is flowing again,” one person familiar with the company told the FT.

But while the debt-laden Chinese conglomerate was bolstered by $4.6 billion in recent asset sales, HNA has relied on initial public offerings and secondary offerings to steady its balance sheet as it’s struggled to find buyers to match its spending spree over the past four years, the Financial Times reported.

“There’s no big buyer stepping up. If there’s someone lurking out there they aren’t going to put their head above the parapet,” said Fraser Howie, co-author of Red Capitalism. “You go to the public markets now because it’s the last resort.”

The company also has two IPOs in the pipeline, the first of which could raise $1.06 billion.

HNA has roughly $4 billion worth of real estate up for sale, including 245 Park Avenue, which it bought last year for $2.21 billion. Any buyer would have to spend hundreds of millions to upgrade the 1960s-era tower.

The company has roughly $4 billion worth of real estate up for sale, including 245 Park Avenue, which it bought last year for $2.21 billion. [FT]Rich Bockmann


Related Articles

arrow_forward_ios
With a cooling trade war, stocks perform well, including real estate. (Credit: iStock)

Real estate stocks push up this week as U.S.-China trade tensions ease

Real estate stocks push up this week as U.S.-China trade tensions ease
416 West 25th Street and Maverick Real Estate Partners principal David Aviram (Credit: Google Maps and LinkedIn)

Chelsea landlord claims “predatory” lender is charging a crippling interest rate as punishment after losing foreclosure case

Chelsea landlord claims “predatory” lender is charging a crippling interest rate as punishment after losing foreclosure case
Blackstone's Frank Cohen and Amazon CEO Jeff Bezos with the HQ2 site (Getty; Blackstone; Google Maps)

Amazon grows HQ2 site near DC with hotel buy

Amazon grows HQ2 site near DC with hotel buy
Rendering of the Tokyo Tokiwabashi project (Courtesy of Mitsubishi)

Mitsubishi unveils design for Japan’s tallest skyscraper

Mitsubishi unveils design for Japan’s tallest skyscraper
Charles Rettig, Commissioner of the IRS (Getty)

Opportunity Zone rule change seeks to entice foreign investors

Opportunity Zone rule change seeks to entice foreign investors
The proposal to rezone Industry City in Brooklyn was unveiled five years ago, but collapsed under political pressure (Courtesy of Industry City)

Here’s how Industry City’s controversial rezoning unraveled

Here’s how Industry City’s controversial rezoning unraveled
731 Lexington Avenue and 410 East 61st Street (inset) with Vornado's Steve Roth (Googel Maps; VNO)

Home Depot eyes former Bed Bath & Beyond space on First Ave

Home Depot eyes former Bed Bath & Beyond space on First Ave
Ian Schrager and the Pulic Hotel at 215 Chrystie Street (Getty; Google)

$60M mezz loan on Ian Schrager’s Public Hotel is for sale

$60M mezz loan on Ian Schrager’s Public Hotel is for sale
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...