Liaoning Fangda Group Industrial is looking for a RMB20bn (USD3bn) emergency loan to help with the running of Hainan Airlines [600221:CH], the main airline business of the HNA group, as reported by Caixin on July 16. The Hainan Provincial Government is assisting Liaoning Fangda in obtaining loans since banks are concerned about Hainan Airlines’ high debt ratio. According to the source, Liaoning Fangda has frequently requested financial support from the Hainan provincial government, including a capital injection and tax exemptions.

HNA Group owns 14 airline companies and operates 13 airports. Since 2013, HNA Group has purchased numerous businesses in various industries globally, including aviation, hospitality, tourism, real estate, financial services, logistics, and others. Due to frequent mergers and acquisitions, HNA Group’s debt increased from RMB200bn (USD30bn) in 2013 to RMB707bn (USD105bn) in the first half of 2019, with a gearing ratio of 72%. As a result, on January 29, 2021, HNA Group declared that it had submitted an application for reorganization bankruptcy and was seeking strategic investors for each of its four major sectors. Liaoning Fangda then would contribute RMB41bn (USD6bn) to take over the primary aviation sector. Hainan Airlines is still under tremendous operating pressure due to COVID-19,  anticipating a net loss of RMB11.95bn (USD1.8bn) to RMB12.96bn (USD1.92bn) in the first half of the year, which is roughly 13 to 14 times greater than the loss experienced during the same period last year.

Source:

https://www.prnasia.com/lightnews/lightnews-1-65-41401.shtml

https://www.caixinglobal.com/2022-07-16/exclusive-hainan-airlines-operator-seeks-3-billion-emergency-loan-sources-say-101914086.html

https://finance.sina.com.cn/stock/s/2022-05-12/doc-imcwipii9489333.shtml

https://www.toutiao.com/article/7122081825954103815/?channel=&source=search_tab