China’s HNA Group Scraps Two IPOs In Two Weeks Citing Market Uncertainty

The campaign by Chinese aviation-based conglomerate HNA Group to pay down debt by unloading assets appears to have slowed  in the face of market turbulence.

On Tuesday in Zurich, its wholly-owned subsidiary Swissport Group, a cargo handling and ground services provider, announced that it had deferred its planned initial public offering (IPO). The announcement comes roughly two weeks after another HNA subsidiary, Gategroup Holding, scrapped its own IPO plan.

Swissport did not provide a detail explanation for the deferral, but said it will delay its IPO plan "due to current market conditions." The firm announced its plan to list on the SIX Swiss Exchange in January.

"HNA is seeking robust pricing, at a time when markets are volatile, interest rates are rising, and trade tensions are flaring," said Brock Silvers, founder of Kaiyuan Capital, a Shanghai and Hong Kong-based investment advisory firm.

Swissport, which generated consolidated operating revenue of US$3.5 billion last year, appears to have followed the path taken by HNA subsidiary Gategroup, the parent company for 10 brands that provide services to the travel industry, including catering, hospitality and logistics. Gategroup was set to raise as much as US$1.2 billion, but canceled the sale shortly before trading was scheduled to start because of disappointing investor demand.

HNA has been selling assets to pay down its debts in the wake of a US$50 billion acquisition spree. Last week, it announced that it would  sell its US$6.3 billion stake in Hilton Worldwide Holdings Inc. Last month, it agreed to sell all its 25% stake in Hilton Grand Vacations Inc., a timeshare spinoff from Hilton Worldwide, as well as announcing plans to sell its US$1.4 billion stake in U.S. hotel company Park Hotels & Resort Inc. In February, its Hong Kong unit said it will sell two Hong Kong properties for HK$16 billion (US$2 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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