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

Heavily indebted and distressed Chinese conglomerate, HNA Group, whose debts amount to at least $187bn, has been reported to delay the submission of a proposal for the restructuring of its airlines-to-property business by three months. Sources said that China’s three state-owned airlines – Air China, China Southern Airlines and China Eastern Airlines – are reluctant to acquire a stake in HNA due to China’s aviation industry being hit hard by the pandemic. The sector’s net losses reached CNY 97.4bn ($15bn) in 2020, according to data from the Civil Aviation Administration of China.

HNA Group has been neck-deep in debt over the past few years, since Beijing cracked down on highly-leveraged overseas acquisitions by some Chinese conglomerates. The group has been selling assets to pay its debt and maintain operations but the pandemic has worsened the situation. The embezzlement of funds at three HNA units by the parent company amounting to $10bn has complicated the restructuring. If the exercise fails, it will result in a final declaration of bankruptcy by the courts and liquidation.

HNA group’s 6.25% 2021s were flat, trading at a distressed level of 23.275.

For the full story, click here.

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