HNA Group Co., Ltd., was a Chinese conglomerate headquartered in Haikou, Hainan, China. Founded in 2000, it was involved in numerous industries including aviation, real estate, financial services, tourism, logistics, and more.[ Company Overview of HNA Group Co., Ltd. . Bloomberg Business. Retrieved 11 February 2016.] It was the owner of Hainan Airlines and a part owner of Grand China Air.
History
In 1993, Chen Feng, Wang Jian,
Tan Xiangdong, among others, created
Hainan Airlines, with approval by the Hainan Provincial Government.
Following a restructuring of the airline in 1997, they founded HNA Group Co. Ltd. in January 2000.
[ "HNA Group on the acquisition trail" . CAPA - Centre for Aviation. 11 August 2011. Retrieved 11 February 2016.][ "Biography of Chen Feng" . The Wharton Global Alumni Forum: June 12–13, 2009 | Beijing. Retrieved 11 February 2016.][ "HNA Chairman Chen Feng’s Growth Strategy: Go Global in the Downturn" . Knowledge@Wharton. 27 February 2013. Retrieved 11 February 2016.] After this, the Group underwent great diversification, entering multiple industries such as
tourism and
logistics. It also significantly expanded its involvement with both national and international companies. These included several
, NH Hotel Group,
[Wen, Wang (19 November 2014). HNA Group buys 8.3% equity stake in NH Hotel Group of Spain . China Daily. Retrieved 11 February 2016.] Uber,
[Carsten, Paul (11 January 2016). "Uber drives into China tourism industry with HNA Group tie-up" . Reuters. Retrieved 11 February 2016.] and an office tower and a hotel in New York City. HNA Group had spent more than US$3 billion on foreign acquisitions. It had intended to be one of the top 50 companies in the world by 2030.
[Mellor, William and Wang, Jasmine (23 May 2014). For Hainan Airlines's Chen Feng, rise of resort in China provides lift for a new sky empire . The Washington Post. Retrieved 11 February 2016.]
In October 2005, Soros Quantum Fund invested $25 million stake in HNA Group.[ You've Never Heard of HNA Group. Here's Why You Will . The Fortune. December 24, 2017]
On February 18, 2016, HNA reached an agreement to acquire Ingram Micro, a California-based technology distributor, for $6 billion, in the largest Chinese takeover of a US information technology company. HNA Group was then advised by China International Capital Corporation in the transaction.
In July 2017, HNA was targeted by the Central Government in a set of new measures that prohibit state-owned banks from lending money to Chinese private companies to curb their foreign investment activities and also over concerns about HNA's debt levels.
A year after investing, HNA Group was in talks to sell some or all of its 25% share in Hilton Grand Vacations, a timeshare business which had spun off from Hilton Worldwide Holdings the year before.
Overall debt in 2017 is said to have reached $94 billion at a borrowing cost of $5 billion for the full year. To ease the burden, the company disposed of assets worth $13 billion. The liquidity shortage also led the non-delivery of up to six Airbus A330 aircraft to be delivered to the group.
On 29 January 2021, HNA Group declared bankruptcy after debt restructuring efforts failed.
Employment numbers
In 2017 the total number of employees in the Group was over 410,000 and the number of overseas employees was nearly 290,000.
Entities
HNA Group was composed of seven sub-groups: HNA Aviation, HNA Tourism, HNA Capital, HNA Holdings, HNA Modern Logistics, HNA Innovation Finance, and HNA Innovation Media & Entertainment.
HNA Aviation
In December 2021, HNA Aviation was sold to Liaoning Fangda Group Industrial.
HNA Aviation is affiliated with multiple Chinese . These include the following:[ Grand China Air ups stake in Hainan Airlines to 35% . www.ch-aviation.com. December 24, 2017][Ge, Lena (9 December 2015). "HNA Group's Air Guilin Unveils Its Logo and Livery" . China Aviation Daily. Retrieved 11 February 2016.]
The group also has stakes in some carriers based outside the Chinese mainland, including Hong Kong Airlines as well as Africa World Airlines, Azul Brazilian Airlines (23.7%),[Horch, Dan (24 November 2015). "Brazilian Airline Azul Sells Stake to HNA Group of China" . The New York Times. Retrieved 11 February 2016.] MyCargo Airlines,[ "HNA Group and Bravia Capital complete acquisition of ACT Airlines; rebranded as MyCargo Airlines" . CAPA - Centre for Aviation. 25 October 2011. Retrieved 11 February 2016.] TAP Air Portugal (2.5%) and had a stake in Virgin Australia (13%).
On 18 January 2016, HNA Aviation formed the world's first alliance of low-cost carriers, U-FLY Alliance. While the founding members of the alliance—HK Express, Lucky Air, Urumqi Air, and West Air—are all affiliated with HNA Aviation, the alliance is also open to airlines not within HNA Group.[ "HNA Group: four airlines form U-FLY Alliance, world's first LCC grouping, showing HNA consolidation" . CAPA - Centre for Aviation.22 January 2016. Retrieved 11 February 2016.]
On 27 March 2019, HNA Aviation sold full stake of HK Express to Cathay Pacific for HK$4.93 billion. The transaction was expected to be completed by 31 December 2019, and by that time HK Express would become Cathay Pacific's wholly owned subsidiary.
Other entities
HNA Tourism is involved in the
tourism industry. Subgroup HNA Hospitality Group operates several resorts, business hotels,
, and the Tangla hotel chain.
[ "HNA Group: HNA Capital" . HNA Group. Retrieved 11 February 2016]
In 2015, the HNA Group purchased a failing hotel in Kerhonkson, New York, in upstate New York. The Hudson Valley Resort & Spa was featured on an October 2017 Planet Money podcast exploring why a Chinese multinational company would invest in a remote hotel in the United States.
HNA Capital deals with financial services and investment banking. It has over 30 member companies,[ "HNA Group: HNA Capital" . HNA Group. Retrieved 11 February 2016] such as Bohai Trust.
HNA Holdings is involved in real estate and the retail.[ "HNA Group: HNA Holdings" . HNA Group. Retrieved 11 February 2016.] Subgroup HNA Airport Group operates 16 airports across China, including the airports in Haikou, Sanya, Weifang Airport, Dongying, Yichang, Anqing, and Yingkou.[ "HNA Holdings: Airport Management". HNA Group. Retrieved 11 February 2016]
HNA Logistics is engaged with shipbuilding, marine cargo transport, air cargo, and other elements of logistics.[ "HNA Group: HNA Logistics" . HNA Group. Retrieved 11 February 2016]
HNA Innovation Finance
HNA Innovation Media and Entertainment.
Subsidiaries
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HNA Industrial Group
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HNA Infrastructure Holding Group
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HNA Infrastructure Investment Group
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HNA Aviation (100%)
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HNA Aviation (Hong Kong) Holdings (100%)
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HNA Aviation (Hong Kong) Air Catering Holding (100%)
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HNA Innovation Finance Group
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Advanced Card Systems Holdings ()
Leadership
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Chen Feng (co-founder and chairman of the board)
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Wang Jian (co-founder and chairman of the board), died on 3 July 2018 in an accident
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Tan Xiangdong or Adam Tan (co-founder and vice-chairman of the board and CEO)
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Li Xianhua (co-founder and vice-chairman of the board)
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Lu Ying (vice-chairman of the board)
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Chen Wenli (co-founder and member of the board of directors)
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Zhang Ling (member of the board of directors and CEO)
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Chen Xiaofeng (member of the board), son of Chen Feng
Investments and acquisitions
Equity investments
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Grand China Air (23.11%) as second largest shareholder
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Haikou Meilan International Airport
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Hainan Airlines (4.88% directly; additional 4.25% via subsidiary Changjiang Leasing) as second largest shareholder; Grand China Air is the largest shareholder of Hainan Airlines.
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HNA Infrastructure
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AID Partners Capital Holdings (via HNA Group Holding and subscription of convertible bond).
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HNA Technology (20.76% via HNA Technology Group)
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Ingram Micro (100%), it was divested in 2020 for US$7.2 billion.
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Deutsche Bank (previously 9.90% as the largest shareholder as of April 2017, jointly owned by subsidiaries BL Capital Holdings and HNA Innovation Finance Group via C-QUADRAT Special Situations Dedicated Fund;
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NH Hotel Group (29.34% as of 27 February 2017)
Acquisitions
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In 2006, the HNA Group acquired two airlines in Hong Kong, Hong Kong Airlines and Hong Kong Express Airways.
[ Washington Post: "For Hainan Airlines’ Chen Feng, rise of resort in China provides lift for a new sky empire" By William Mellor and Jasmine Wang May 23, 2014]
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In 2011, the HNA Group paid US$260 million for a foreclosure-threatened Manhattan office tower at 1180 Sixth Avenue
[ New York Times: "Chinese Investors Pursue U.S. Property Deals" By JULIE CRESWELL June 25, 2013] and purchased the Cassa Hotel New York for US$126 million.[ Wall Street Journal: "Massey Knakal Plays Role Refinancing Midtown Hotel" by Craig Karmin March 2, 2014]
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In May 2011, the HNA Group purchased a 20% interest in the NH Hotel Group for €431.6 million (US$610.7 million)
[ Hotel News Now: "HNA Group acquires 20% stake in NH Hoteles" 17 May 2011] and in November 2014, HNA increased its ownership to 29.5%.[ Reuters: "China's HNA buys 8.33 pct of Spain's NH Hoteles from Italy's Intesa" November 11, 2014]
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In August 2011, the HNA Group purchased GE Seaco via its Bohai Leasing affiliate for US$1.05 billion,
[ Bloomberg: "GE Agrees to $1.05 Billion Sale of SeaCo to HNA, Bravia" by Zachary R. Mider, Rachel Layne and Natalie Doss August 1, 2011] the world's 5th largest marine container leasing company.[ Seaco Global website: "HNA Group and Bravia Capital to Acquire GE SeaCo" January 08, 2011]
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In October 2012, the HNA Group completed its acquisition of a 48 percent stake in Aigle Azur, France's second largest airline, for €52 million.
[The airline ceased operations in 2019. Wall Street Journal: "China's HNA Group to Buy Stake in France's Aigle Azur" by DINNY MCMAHON
]
October 22, 2012
2015
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In January 2015, affiliate Bohai Leasing purchased the Bermuda-based container leasing group, Cronos Limited, for €2.18 billion.
[ Seac Global: "Bohai Leasing Company purchases Cronos Limited" January 26, 2015]
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In June 2015, HNA purchased a 6.2% interest in the South African airline, Comair.
[ "HNA/Hainan Airlines buys 6.2% of South Africa's Comair, accelerating China-Africa aviation links" . CAPA - Centre for Aviation. 2 June 2015. Retrieved 11 February 2016.]
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In June 2015, HNA Group bought a 15 percent stake in Red Lion Hotels Corporation from Columbia Pacific Advisors.
[ Bloomberg: "After $17 Billion Deal Spree, Chen Juggernaut Loses in London" February 26, 2016]
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In July 2015, HNA Group purchased airport ground handler Swissport International Ltd. from PAI Partners SAS for 2.73 billion Swiss francs (US$2.8 billion).
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In November 2015, the HNA Group announced it would invest US$450 million in low-cost carrier Azul Brazilian Airlines, becoming its single largest shareholder,
[ Air Transport World: "China’s HNA Group eyes further investments" by Victoria Moores June 22, 2016]
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In November 2015, HNA Group announced it would make a 10% investment in French hotelier Pierre & Vacances.
[ LePoint: "Après Fram, le chinois HNA s'intéresse à Pierre & Vacances - Le conglomérat HNA, ancien candidat à la reprise de Fram, pourrait prendre une participation de 10 % dans le groupe français spécialisé dans le tourisme" 09/11/2015]
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In late 2015, HNA Group acquired the US-based start-up travel portal Travana with an investment of US$27.5 million.
2016
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In January 2016, the HNA Group via its Bohai Leasing affiliate, purchased Irish aircraft leasing company Avolon. When combined with HNA's existing aircraft leasing business, the new entity with over 500 aircraft will become the world's fourth largest aircraft leasing business by asset value.
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In February 2016, the HNA Group agreed to purchase technology distributor, Ingram Micro for $6.0 billion, via its controlled affiliate, Tianjin Tianhai Investment Co Ltd.
[ New York Times: "Ingram Micro Sold to Chinese Company for $6 Billion" By Amie Tsang February 18, 2016]
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In April 2016, the HNA Group purchased the London-based, ICE - International Currency Exchange.
[ China Travel News: "HNA Group extends European foray in deal with forex provider ICE April 21, 2016]
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In April 2016, the HNA Group purchased US$38B in sales Minneapolis-based Carlson Rezidor Hotel Group (owner of the Radisson Hotels brand) which included a majority interest in US$7 billion in sales Rezidor Hotel Group of Brussels.
[ Wall Street Journal: "China’s HNA to Buy Carlson Rezidor Hotel Group - HNA to also acquire Carlson’s stake in Stockholm-listed Rezidor Hotel Group" By WAYNE MA, KANE WU, and JOSH BECKERMAN April 28, 2016]
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In April 2016, the HNA Group purchased gategroup, the 2nd largest airline-catering company in the world, for $1.5 billion.
[ Bloomberg: "China's HNA to Buy Airline Caterer Gategroup for $1.5 Billion" April 11, 2016]
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In May 2016, the HNA Group purchased 49.99% of Air France's catering and cleaning subsidiary, Servair, with the option to increase its stake to 80% if certain conditions are met.
[ Financial Times: "HNA set to swoop on Air France’s Servair" May 30, 2016][ Financial Times: "China’s HNA group snaps up stake in Virgin Australia" by Adam Thomson and Jamie Smyth May 31, 2016] When combined with previously purchased Gategroup, HNA will own and operate the world's largest airline catering company.
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In May 2016, the HNA Group purchased a 13% interest in Virgin Australia Holdings with the option to increase its stake to 20%.
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In May 2016, the HNA Group purchased a 7% interest in private consortium Atlantic Gateway, the owner of 50% of TAP Airlines, as well as convertible shares, which if exercised, would increase its stake in Atlantic to 40% and its indirect ownership of TAP to 20%.
[ Dinheiro: "Chineses da HNA podem ficar indiretamente com 20% da TAP" by Steven Governo 21 Maio 2016]
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In July 2016, the HNA Group purchased an 80% stake in the Zurich-based aircraft maintenance organization SR Technics from Abu Dhabi's state investment company Mubadala.
[ Air Transport World: "China’s HNA Group acquires majority stake in SR Technics" by Alan Dron July 20, 2016]
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In October 2016, the HNA Group announced that it would purchase 25 percent of Hilton Worldwide Holdings Inc. from the Blackstone Group LP for $6.5 billion.
[ Bloomberg: "China’s HNA to Buy $6.5 Billion Hilton Stake From Blackstone" by Hui-Yong Yu and Neil Callanan October 24, 2016]
2017
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In January 2017, HNA Group announced the purchase of asset finance firm UDC Finance, New Zealand's largest non-bank lender, for NZL $660 million (US$460 million)
[ Reuters: "China's HNA extends reach to NZ with $460 mln purchase of non-bank lender UDC" by Jamie Freed January 11, 2017] by its Tip Trailer Services affiliate in Europe.[ Interest.com New Zealand: "Chinese conglomerate HNA plans to place NZ finance company UDC under the wing of its large European-Canadian equipment service subsidiary TIP Trailer Services" May 12, 2017] The sale was still pending as of October 2017 due to regulatory issues.
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In February 2017, HNA Group's HNA Capital arm purchased a 3.04% stake in Deutsche Bank.
[ Financial Times: "China’s HNA snaps up 3% stake in Deutsche Bank - Conglomerate moves as embattled German lender’s share price shows signs of recovery" by James Shotter February 17, 2017] Their stake was soon after increased to 4.76%[ Handelsblatt: "Report: China’s HNA Eyes State Bank" by Frank Drost 02 April 2017] and then to 9.9% in May 2017, becoming their single largest shareholder.[ Bloomberg: "Deutsche Bank's Chinese Backer HNA Becomes Top Shareholder" by Eyk Henning and Steven Arons May 02, 2017]
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In March 2017, HNA Group announced that it would purchase an 82.5% equity interest in Frankfurt–Hahn Airport,
[ South China Morning Post: "HNA to buy majority stake in Hahn airport in Germany - If deal goes ahead, it will help take the owner of Hainan Airlines take a step closer to becoming one of the world’s top 100 companies" by Sandy Li 06 March, 2017] a former US military airbase which is popular with budget and cargo carriers (though 120 km from Frankfurt). This is the HNA Group's first acquisition of a non-Chinese airport.
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In March 2017, HNA Property Group, an affiliate of HNA Group, announced that it would purchase 245 Park Avenue for $2.21 billion, one of the highest prices ever paid for a New York City skyscraper.
[ The Real Deal: "HNA backs Tishman Speyer’s bets in Brooklyn, Hudson Yards" By Katherine Clarke April 05, 2017]
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In March 2017, affiliates of the HNA Group purchased a 25 percent interest in Old Mutual's U.S. asset management business for US$446 million.
[ Bloomberg: "China's HNA Buys $446 Million Stake in Old Mutual U.S. Unit" March 25, 2017]
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In March 2017, affiliates of the HNA Group purchased an aggregate 400,000 square feet of land at the former site of the Kai Tak Airport in Hong Kong for US$1.135 billion. HNA plans to develop the land into a "world-class integrated residential complex."
[ South China Morning Post: "HNA shares plunge after fugitive tycoon’s allegations" by Karen Yeung 24 April 2017]
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In April 2017, HNA Group affiliate, Avolon, completed the purchase of CIT Group's aircraft leasing business for US$10.38 billion making HNA the 3rd largest aircraft leasing company in the world with a fleet of 868 aircraft.
[ Avolon News: "Avolon completes US$10.38 billion acquisition of CIT Group aircraft leasing business - Avolon becomes world’s third largest lessor with combined fleet of 868 aircraft" April 4, 2017]
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In April 2017, affiliates of the HNA Group purchased from Odebrecht its 60% share in a consortium that owns 51% of Rio de Janeiro–Galeão International Airport - Brazil's second busiest airport - giving HNA a 31.6% ownership interest. The remaining shares are owned by Brazilian airport manager Empresa Brasileira de Infraestrutura Aeroportuária (Infraero) (49%) and Changi Airports International Pte Ltd (19.4%) of Singapore.
[ Macuhub: "Chinese group HNA enters the consortium that manages the airport of Rio de Janeiro, Brazil" April 27, 2017]
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In August 2017, HNA Group purchased a 16.2% stake in Swiss-based travel retailer Dufry from Temasek and the Singapore Investment Corp. HNA Groups stake was increased to 20.92%; the value of their interest was reported to be $1.4 billion.
[ Reuters: "China's HNA Boosts Dufry Stake, pursues CWT purchase plan" by Kane Wu August 21, 2017]
Divestments
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In March 2019, HNA agreed to sell its 69.54% interest in Hong Kong International Construction Management Group to the Blackstone Group for $894 million.
Shareholders
The shares of HNA Group were owned by two companies directly: Hainan Jiaoguan Holding (l=Hainan Traffic Administration Holding) for 70% and Yangpu Jianyun Investments (s=洋浦建运投资) for 30%. Two companies originally were incorporated by Chinese state-owned enterprises, such as Haikou Meilan International Airport.
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Hainan Traffic Administration Holding was 50% owned by Tang Dynasty Development (Yangpu) (s=盛唐发展(洋浦)), 25% by Yangpu Hengsheng Chuangye (s=洋浦恒升创业) and 18.21% by Yangpu Zhongxin Airlines Holding (s=洋浦中新航空实业) and 6.78% by Hainan Xinhuading Trading (s=海南炘华鼎贸易) as of March 2017.
Tang Dynasty Development (Yangpu) was 65% owned by Hainan Province Cihang Charity Foundation (s=海南省慈航公益基金会)[ and 35% by Hong Kong incorporated company Tang Dynasty Development (s=盛唐发展).
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Tang Dynasty Development was 98% owned by Cayman Islands-incorporated Pan-American Aviation Holding and 2% owned by Hainan Airlines.
Pan-American Aviation Holding was 100% owned by Guan Jun as of 2016 (p=Guàn Jūn, acquired from Bharat Bhisé in 2016).
Yangpu Hengsheng Chuangye was owned by HK incorporated company Headstreams Investment (s=千江源投资), which was 98% owned by Bharat Bhisé and 2% by R.J. Conrads in 2004.[Filing in Hong Kong Companies Registry]
Yangpu Jianyun Investments and Yangpu Zhongxin Airlines Holding were owned by The Committee of Hainan Airlines Trade Union (s=海南航空股份有限公司工会委员会).[ However, all the stake owned by the union, were transferred in 2016. According to the record in the National Credit Information Publicity System, part of the stake (6.78%) of Hainan Traffic Administration Holding held by Zhongxin Airlines Holding was transferred to newly established company Xinhuading.][ While Jianyun Investments was now owned by HNA Group directors Chen Feng (s=陈峰, 35.05%), Wang Jian (s=王健, 35.05%), Chen Wenli (s=陈文理, 9.23%), Tan Xiangdong (s=谭向东, 6.89%), Li Jing (s=李箐, 6.89%) and Li Xianhua (s=李先华, 6.89%).][ For Zhongxin Airlines Holding, the owners also became the 6 shareholders of Jianyun Investments with the same ratio;][ for newly established Xinhuading, the shareholders were 4 more HNA Group directors Lu Ying (s=逯鹰), Zhang Ling (s=张岭) Huang Gan (s=黄玕) and Huang Qijun (s=黄琪珺).][ Filings in National Credit Information Publicity System (in Chinese)]
After much speculation on his identity, Guan Jun, by-then the indirect second largest shareholder of HNA Group (who acquired the stake from Bharat Bhisé), donated the stake to a US-registered private foundation Hainan Cihang Charity Foundation, Inc. in 2017.
Reuters also interviewed Bharat Bhisé, who had served as a director of several subsidiaries of HNA Group, as well as a business partner in acquisition via Bhisé's owned Bravia Capital as well as a dealmaker, say he hold the shares of HNA Group indirectly, was “an 'accommodation' to the company and received no compensation for doing so”.
In 2017, the Swiss Takeover Board ruled that HNA Group provided false information regarding Bhisé and Guan on the takeover of Gategroup.
External links
