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The $94 Billion Mystery: What Will Be Left of HNA’s Empire?

After a global acquisition binge, the Chinese conglomerate has hefty debt payments—and not enough earnings to cover them.
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Illustration: Joe Melhuish for Bloomberg Businessweek

As HNA Group Co. rose from provincial obscurity to becoming perhaps China’s most acquisitive global company, its executives made no secret of their desire to play in the big leagues. It appears they got their wish—just not in the way they wanted.

An annual report released in late April revealed that HNA spent more on interest than any nonfinancial company in Asia last year, a $5 billion bill that represented a more than 50 percent increase from the year before. A sprawling conglomerate with roots in a middling regional airline that was founded on China’s sleepy, tropical Hainan Island, HNA carried a total of $94 billion in debt at the end of 2017, a hangover from a dizzying global acquisition spree that made it the proud owner of a huge trove of trophy real estate and blue-chip corporate stakes.