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China Takes Charge of HNA, Paving Way for Faster Asset Sales

  • Hainan government installs new leaders atop debt-laden group
  • Move is ‘great news for bondholders,’ credit researcher says
Views of HNA Group's Headquarters and Properties in Hainan Island
Photographer: Qilai Shen/Bloomberg
Updated on

China began assuming control of debt-laden HNA Group Co., paving the way for a hastened selloff of the once-sprawling conglomerate’s remaining assets after it became one of the biggest corporate casualties of the coronavirus outbreak. HNA-related shares rose.

Saturday’s announcement that the Hainan provincial government appointed new leaders atop HNA and is assuming management of its liquidity risks is tantamount to China declaring it’s taking over decision making at the group, according to people familiar with the matter, who asked not to be named discussing private deliberations. State authorities will now go through HNA’s books to figure out how to sell off the group’s assets and pay off debt, they said.