HNA Group


HNA Group Co., Ltd., is a Chinese conglomerate headquartered in Haikou, Hainan, China. Founded in 2000, it is involved in numerous industries including aviation, real estate, financial services, tourism, logistics, and more. It is a part owner of Grand China Air, and owns 25% of Hilton Worldwide. In July 2017, HNA Group ranked No. 170 in 2017 Fortune Global 500 list with a revenue of $53.335 billion. It is one of the most active investment companies in the world, acquiring numerous assets under its name.

History

In 1993, Chen Feng and Wang Jian created Hainan Airlines, with approval by the Hainan Provincial Government. Following a restructuring of the airline in 1997, they founded HNA Group Co. Ltd. in January 2000.
Since then, the Group has undergone great diversification, entering multiple industries such as tourism and logistics. It also significantly expanded its involvement with both national and international companies. These include several airlines, NH Hotel Group, Uber, and an office tower and a hotel in New York City. HNA Group has spent more than US$3 billion on foreign acquisitions. It intends to be one of the top 50 companies in the world by 2030.
In October 2005, Soros Quantum Fund invested $25 million stake in HNA Group.
On February 18, 2016, HNA reached an agreement to acquire Ingram Micro Inc, a California-based technology distributor, for $6 billion, in the largest Chinese takeover of a US information technology company. HNA Group was then advised by China International Capital Corporation in the transaction.
In July 2017, HNA was targeted by the Central Government in a set of new measures that prohibit state-owned banks from lending money to Chinese private companies to curb their foreign investment activities and also over concerns about HNA's debt levels. Several banks associated with HNA's foreign investments halted new loans since, though some had already suspended their grants before the measures were signed into effect.
A year out after investing, HNA Group was in talks to sell some or all of its 25% share in Hilton Grand Vacations, a timeshare business which had spun off from Hilton Worldwide Holdings the year before.
Overall debt in 2017 is said to have reached $94 billion at a borrowing cost of $5 billion for the full year. To ease the burden, the company disposed of assets worth $13 billion. The liquidity shortage also led the non-delivery of up to six Airbus A330 aircraft to be delivered to the group.

Employment numbers

The total number of employees in the Group is over 410,000 and the number of overseas employees is nearly 290,000, owning RMB330 billion in overseas assets since its major acquisitions began in 2010.

Entities

HNA Group is composed of seven sub-groups: HNA Aviation, HNA Tourism, HNA Capital, HNA Holdings, HNA Modern Logistics, HNA Innovation Finance, and HNA Innovation Media & Entertainment.

HNA Aviation

HNA Aviation is affiliated with multiple Chinese airlines. These include the following:
The group also has stakes in some carriers based outside the Chinese mainland, including Hong Kong Airlines as well as Africa World Airlines, Azul Brazilian Airlines, Comair, MyCargo Airlines, TAP Air Portugal and a pending stake in Virgin Australia.
On 18 January 2016, HNA Aviation formed the world's first alliance of low-cost carriers, U-FLY Alliance. While the founding members of the alliance—HK Express, Lucky Air, Urumqi Air, and West Air—are all affiliated with HNA Aviation, the alliance is also open to airlines not within HNA Group.
On 27 March 2019, HNA Aviation sold full stake of HK Express to Cathay Pacific for HK$4.93 billion. The transaction was expected to be completed by 31 December 2019, and by that time HK Express would become Cathay Pacific's wholly owned subsidiary.

Other entities

HNA Tourism is involved in the tourism industry. Subgroup HNA Hospitality Group operates several resorts, business hotels, boutique hotels, and the Tangla hotel chain.
In 2015, the HNA Group purchased a failing hotel in Kerhonkson, New York in upstate New York. The Hudson Valley Resort & Spa was featured on an October 2017 Planet Money podcast exploring why a Chinese multinational company would invest in a remote hotel in the United States
HNA Capital deals with financial services and investment banking. It has over 30 member companies, such as Bohai Trust.
HNA Holdings is involved in real estate and the retailing industry. Subgroup HNA Airport Group operates 16 airports across China, including the airports in Haikou, Sanya, Weifang, Dongying, Yichang, Anqing, and Yingkou.
HNA Logistics is engaged with shipbuilding, marine cargo transport, air cargo, and other elements of logistics.
HNA Innovation Finance is headquartered in Hong Kong; its main business covers bulk commodity trading, financial investment and consumer finance products and services.
HNA Innovation Media and Entertainment.

Subsidiaries

Equity investments

The shares of HNA Group were owned by two companies directly: Hainan Jiaoguan Holding for 70% and Yangpu Jianyun Investments for 30%. Two companies originally were incorporated by Chinese state-owned enterprises, such as Haikou Meilan International Airport.
Hainan Traffic Administration Holding was 50% owned by Tang Dynasty Development , 25% by Yangpu Hengsheng Chuangye and 18.21% by Yangpu Zhongxin Airlines Holding and 6.78% by Hainan Xinhuading Trading as of March 2017.
Tang Dynasty Development was 65% owned by Hainan Province Cihang Charity Foundation and 35% by Hong Kong incorporated company Tang Dynasty Development.
Tang Dynasty Development was 98% owned by Caymans-incorporated Pan-American Aviation Holding and 2% owned by Hainan Airlines.
Pan-American Aviation Holding was 100% owned by Guan Jun as of 2016.
Yangpu Hengsheng Chuangye was owned by HK incorporated company Headstreams Investment, which was 98% owned by Bharat Bhisé and 2% by R.J. Conrads in 2004. As in 2015 Bhisé still owned 98% of Headstreams Investment, while the 2% stake of Headstreams was owned by Caymans-incorporated HAC, Limited as in 2011. In 2016, Bhisé also transferred the stake of Headstreams to Jun Guan.
Yangpu Jianyun Investments and Yangpu Zhongxin Airlines Holding were owned by The Committee of Hainan Airlines Trade Union. However, all the stake owned by the union, were transferred in 2016. According to the record in the National Credit Information Publicity System, part of the stake of Hainan Traffic Administration Holding held by Zhongxin Airlines Holding was transferred to newly established company Xinhuading. While Jianyun Investments was now owned by HNA Group directors Chen Feng, Wang Jian, Chen Wenli, Tan Xiangdong, Li Jing and Li Xianhua. For Zhongxin Airlines Holding, the owners also became the 6 shareholders of Jianyun Investments with the same ratio; for newly established Xinhuading, the shareholders were 4 more HNA Group directors Lu Ying, Zhang Ling Huang Gan and Huang Qijun.
After much speculation on his identity, Guan Jun, by-then the indirect second largest shareholder of HNA Group, donated the stake to a US-registered private foundation Hainan Cihang Charity Foundation, Inc. in 2017.
Reuters also interviewed Bharat Bhisé, who had served as a director of several subsidiaries of HNA Group, as well as a business partner in acquisition via Bhisé's owned Bravia Capital as well as a dealmaker, say he hold the shares of HNA Group indirectly, was “an 'accommodation' to the company and received no compensation for doing so”. HNA Group also sued in exile Chinese billionaire Guo Wengui for defamation in June 2017, which Guo was spreading the rumour on the identity of the true owner of the group.
In 2017, the Swiss Takeover Board ruled that HNA Group provided false information regarding Bhisé and Guan on the takeover of Gategroup. In September 2019, the Swiss Financial Market Supervisory Authority announced that it would lodge a criminal complaint against HNA Group for repeatedly filing false disclosures of its shareholding structure.