SOVEREIGN DEBT RESTRUCTURING | MASTERCLASS

A deep dive masterclass on sovereign debt restructuring, to be conducted virtually by Asian high yield bond expert Florian Schmidt.

30 June 2022 (Thu), 5pm Singapore/HK time

Chinese conglomerate HNA Group faces debt claims filed by 60,000 retail investors worth over $4.6bn, as it struggles in a long bankruptcy restructuring. HNA, along with its 320 affiliates, entered bankruptcy restructuring in 2021 with the company facing a total debt of CNY 1.2tn ($187bn) from almost 70,000 creditors. HNA’s creditors demanded the debts to be granted priority repayments, classified as obligations to employees, as a majority of the wealth management products (WMPs) were sold exclusively to HNA employees and relatives. HNA insisted that such debts are equal to other debts. “Between 2017 and 2018 when HNA’s liquidity crisis just started, the company probably could still be able to repay the retail investors after it sold hundreds of billions of yuan of assets,” said the official on the restructuring team. However, management did not handle the matter appropriately and missed the best opportunity as the crisis continued and the pandemic hit, he added.

The company did not report financial results for 2019 and 2020. A $10bn embezzlement came to light earlier this year post which creditors sought restructuring.

HNA’s USD bonds continue to trade at distressed levels with its 6.25% 2021s trading at 22.01 cents on the dollar.

For the full story, click here

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