Exclusive: China’s HNA Group seeks up to $1.5 billion in new fund – document – Thompson Reuters

Frank Turner

Apr 26, 2018

HNA Aviation and Tourism Group – a unit of Chinese conglomerate HNA Group – is aiming to raise up to $1.5 billion by the end of 2018 in a new investment fund, according to a document obtained and reviewed by Reuters. The Overseas Aviation and Tourism Industry Fund will be used primarily for global acquisitions, primarily in the travel, aviation and real estate sectors.

In an article on the Reuters site, reporters John Tilak and Matthew Miller share the main points of the document and provide some background on HNA Group’s rising debt levels and the wider reorganization that is underway. In the past, the group has made direct acquisitions – including more than $50 billion in global M&A deals in 2016 and 2017 – and has accumulated significant debt as a result. By raising capital for the new fund, the group is looking to rely on institutional investors to finance its deals. In addition, the group’s reorganization has included a number of asset transfers and purchases, as well as the sale of overseas real estate and equity investments worth more than $10 billion. In the article, Frank Turner, Osler partner and Co-Head of the firm’s Asia Pacific initiative, offers some insight into the motivation behind HNA Group’s recent activities.

“This is in response to the Chinese government’s prohibition of future investments and concerns that their debt levels are untenable,” he says. “They’re trying to protect their balance sheet.”

Read the full article by John Tilak and Matthew Miller from April 24, 2018, “Exclusive: China’s HNA Group seeks up to $1.5 billion in new fund – document” on the Reuters site.