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China’s HNA Group Looks To Sell US$6.3 Billion Stake In Hilton Worldwide

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Financially-troubled Chinese conglomerate HNA Group Co Ltd. is looking to sell "some or all" of its US$6.3 billion stake in Hilton Worldwide Holdings Inc., according to a regulatory filing by Hilton. HNA, whose holdings range from airlines to hotels and financial services, is rapidly shedding assets to regain financial stability following a two-year, US$50 billion acquisition spree.

No details were provided on when HNA would sell its Hilton stake, or who might be a buyer.

HNA acquired a 25% stake in Hilton Worldwide from the Blackstone Group LP for about US$6.5 billion in 2016. According to today’s filing, the company currently holds a 26.1% stake.

In January 2017,  Hilton Worldwide completed a split into three independent companies including Park Hotels & Resorts and Hilton Grand Vacations.

On March 14, HNA agreed to sell its 25% stake in Hilton Grand Vacations,  a timeshare company, according to Hilton Grand’s securities filing. Two weeks earlier, HNA announced plans to sell its stake in Park Hotels & Resort Inc. for US$1.4 billion.

In February, it disclosed plans to sell two Hong Kong properties to Henderson Land Development Co Ltd for HK$16 billion (US$2 billion).

Along with other major Chinese companies burdened with excessive debt, such as Dalian Wanda and Anbang Insurance, HNA has faced Chinese government criticism and increased scrutiny from analysts. In the first 11 months of 2017, HNA’s bank loans and bonds reportedly increased by more than a third to over RMB637 billion (US$101 billion.

In January, HNA reportedly told creditors that it was facing a liquidity shortage of at least RMB15 billion (US$2.4 billion) as it approached a deadline to repay debts.

 


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