Highly leveraged Chinese conglomerate, HNA Group, may find it even more difficult to see its way clear of mounting debts following the death earlier this week of its co-founder and co-chairman Wang, 57-year old Wang Jian.
Local police told Reuters Wang had fallen 15 metres when he slipped off of a ledge. “He stood on the edge of a sharp drop to get his family to take a picture of him and fell,” an officer with the local police force said. Police said they were not treating his death as suspicious.
The aviation-to-financial conglomerate has been one of the fastest growing corporate entities in China, with interests in some 13 Chinese carriers alongside stakes in six carriers based outside of China, as well as, other logistics businesses, including cargo ground handler Swissport and German air hub Frankfurt-Hahn.
In July 2017, HNA Group ranked No. 170 in 2017 Fortune Global 500 list with a revenue of USD 53.3 billion. The group has spend nearly USD 40 billion on overseas acquisitions, including everything from a 25 per cent stake in Hilton Worldwide to a substantial stake in Deutsche Bank.
Stock exchanges reacted quickly with the Hong Kong-listed CWT, a Singaporean commodities and logistics group acquired by HNA in late 2017, falling as much as 7.4 per cent during the day before closing down 5.6 per cent. Other HNA units traded in Hong Kong tumbled as much as 2.2 per cent.
“Wang Jian’s death could be a big blow since the company’s M&A spree is being unwound and given the scrutiny on the group,” said Michel Brekelmans, an aviation-focused business strategy consultant who was quoted by Nikkei’s Asian Review.
“As co-founder and major shareholder, Wang could have provided a degree of continuity and familiarity with some of the core assets behind the scenes,” Brekelmans added.
Ranking second in the conglomerate’s chain of command, behind co-founder and chairman Chen Feng who was largely the public face of the substantial corporate entity, Wang ran the day-to-day operations and was said to be the key deal-maker.
HNA Aviation is affiliated with multiple Chinese airlines, including Air Chang’an, Beijing Capital Airlines, Fuzhou Airlines, Grand China Air, GX Airlines, Hainan Airlines, HK Express, Hong Kong Airlines, Lucky Air, Tianjin Airlines, Urumqi Air, West Air and Suparna Airlines (formerly Yangtze River Airlines).
Additional the group also has stakes in some carriers based outside China, including Africa World Airlines, Aigle Azur (48 per cent), Azul Brazilian Airlines (23.7 per cent),Comair (6.2 per cent), MyCargo Airlines, TAP Air Portugal (2.5 per cent) and a pending stake in Virgin Australia (13 per cent).
HNA has been selling companies, properties and other investments amassed in places including Hong Kong, Australia, Brazil, the US and Europe as it is under intense government pressure to reduce its debts and rein in its overseas acquisitions.
Total debts of Chinese finance to aviation conglomerate HNA soared in 2017 to RMB 598 billion (USD 94 billion), according to the Financial Times.