HNA once wanted to rule the world. Now he is facing bankruptcy

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Creditors of the Hainan-based company have asked a Chinese court to approve plans for the company to go into bankruptcy, HNA said in a statement Friday. The creditors said the conglomerate could not pay their debts.

The bankruptcy filing marks a major drop for one of the most prominent companies in the country. HNA began its life as an airline but quickly grew through investments in real estate and finance, and overseas property, to become one of the most important players in China’s private sector.

Xi Jinping wants Chinese private companies to fight alongside the Communist Party
Beginning in 2015, HNA embarked on a $ 40 billion purchase spree that included inward investments Hilton (HLT) and Deutsche Bank (DB). By the end of 2017, HNA funds raised 1.2 trillion yuan ($ 186 billion).

But these initiatives were built on a huge amount of debt, which hit 707 billion Yuan ($ 110 billion) by June 2019. The company’s pandemics were exacerbated by the coronavirus pandemic, and in February 2020, government officials in Hainan took control. At the request of the company, authorities set up a “working group” with other organizations in an effort to resolve the HNA financial crisis.

The rapid breakdown of HNA is also the latest sign of the behavior of some of China’s most aggressive global traders. Anbang Insurance, another major square that made major overseas purchases, was seized by Chinese regulators in February 2018. It was once owned by Waldorf Astoria and Strategic Hotels & Resorts.

Beijing, meanwhile, has been trying to hold on to the country’s private sector. Much of the scrutiny of companies like HNA and Anbang began in 2017, when regulators began to take a closer look at their overseas flashy contracts, concerned about meltdown risks.

In the years since then, Chinese officials have taken further steps to keep private companies afloat. The ruling Chinese Communist Party in September last year, for example, unveiled a set of unconventional guidelines urging its members to “educate private businessmen to put weapons on their minds le [Xi’s] social ideology. “
Regulators have also recently been looking for ways to overcome the country’s big tech industry. Alibaba (BABA) he was recently the target of an anti-trust investigation and was asked by his financial partner, Ant Group, to revive his business.

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