HNA said in a statement on Friday that the Hainan-based company’s creditors had asked a Chinese court to approve the company’s plans to declare bankruptcy. Creditors said the consortium could not pay its debts.
The bankruptcy filing marks a steep drop for one of the nation’s most prominent corporations. HNA began its life as an airline but has grown rapidly through investments in real estate, financing and overseas acquisitions, becoming one of the most important players in the private sector in China.
But these acquisitions were built on a lot of debt, which reached 707 billion yuan ($ 110 billion) by June 2019. The company’s problems were exacerbated by the coronavirus pandemic, and in February 2020, government officials took control of Hainan. At the company’s request, the authorities set up a “working group” with other agencies in an effort to solve the financial crisis afflicting HNA.
Meanwhile, Beijing is trying to tighten its grip on the country’s private sector. Much of the scrutiny of companies like HNA and Anbang began in 2017, when regulators began to look closely at their flashy overseas deals, concerned about the liquidity risk.
