HNA to face $3.1 bil liquidity crunch this quarter

(Jan 31): The crisis surrounding HNA Group deepened after it emerged that the Chinese company’s ability to repay its debt will face a potential shortfall of at least 15 billion yuan ($3.1 billion) in the first quarter.

The sprawling conglomerate warned major creditors about its financial status in a meeting in Hainan last week, though it also said that the pressure will probably ease in the second quarter as the group steps up asset disposals, according to people familiar with the matter, who asked not to be named because the discussions are private.

The news illustrates the extent of HNA’s liquidity challenges -- and the urgency behind it -- after the conglomerate spent tens of billions of dollars on debt-fueled investments to transform a little known airline into one of China’s biggest business behemoths. The scale of the funding gap may also deepen concerns about the viability of the group, which owns stakes in everything from Deutsche Bank AG to Hilton Worldwide Holdings Inc., as it faces scrutiny worldwide from regulators and investors.

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