HNA files for bankruptcy, reorganization

HNA Group, the parent company of Hainan Airlines, has applied for bankruptcy and reorganization after a long period of financial struggles.

The conglomerate said it has received notice from the Hainan High People's Court that creditors had sought the company's bankruptcy and restructuring, after a government-led effort to rework its debts did not succeed.

HNA said it will cooperate with the court's review, push forward debt restructuring. It will also support the court's efforts to protect the legitimate rights and interests of the creditors and ensure normal operations of the company.

The company will undertake a series of measures, such as debt transfer, debt-swaps and debt restructuring, and look for new strategic investors, said an HNA executive who did not want to be identified.

Introduction of new strategic investors will bring new funds that could put the company back on the healthy track, said the executive.

The debt-ridden airline group requested Hainan province for assistance last February after its "self-rescue" efforts failed to resolve the risks.

The provincial government formed a joint working group last year in an effort to streamline the shareholding patterns of more than 2,000 enterprises under HNA Group to get a clear picture of the total assets and debts.

The executive said the bankruptcy and restructuring will not affect HNA's aviation business, which comprises 14 companies and 700 commercial aircraft and is the country's fourth largest air carrier.

Gu Gang, former executive chairman and board member of HNA, resigned from his current positions at HNA last Friday and was elected the Party secretary of HNA Group, according to a company statement. The working group will continue to lead the risk resolution work, it said.