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HNA creditors rebel against Chinese conglomerate restructuring program

China’s long campaign to contain the effects of the collapse of the conglomerate HNA faces growing opposition from disgruntled Chinese creditors, according to documents viewed by the Financial Times and private social media groups.

Frustrated creditors could threaten one of the country’s most complex and globally important restructurings with complaints about the state’s managers handling the group’s bankruptcy to the Chinese Communist Party’s internal oversight body. I’m threatening to bring it into a dispute.

“We can’t trample our dignity! We never give up,” said one petitioner.

HNA’s overhaul, which began as an airline and became a global conglomerate, is an important test of Beijing’s ability to handle “too big to fail” entities undertaken by national economic planners. Growth worse than expected Alongside the crisis caused by debt and inconvenience in the real estate sector Lack of energy..

Beijing’s approach to HNA. Collapsed After accumulating $ 90 billion in debt Evergrande fate And the vulnerability of corporate restructuring in China. Evergrande, the world’s most debt-rich real estate group, missed interest payments last month, causing protests from domestic investors and rocking the global market.

Tens of thousands of Chinese creditors rented by Hainan-based HNA will need to vote on a proposal to transform 321 group companies into four new entities by Wednesday. This leaves control of the aviation, airport, financial and commercial sectors to state and private shareholders. ..

However, transactions that have been underway for years have been withdrawn. Biting criticism From small creditors and former employees who believe their interests have been ignored in a hurry to end an episode embarrassing for Chinese financial regulators.

“We want the government to see our disagreements, anger and pressure on HNA … to coordinate and rewrite fair proposals,” one creditor told FT. .. Individuals who asked not to reveal their identities for personal safety reasons said the total family loss from the collapse of HNA exceeded RMB 2 million ($ 311,000).

The vote scheduled for Wednesday is the latest twist in HNA’s decades-old story, with its top executives being a vast conglomerate with deep political ties, including: Wang Qishan, Vice President of China and a close ally of President Xi Jinping.

However, the company and its affiliates were placed under bankruptcy jurisdiction as a company in February. Disclosure revealed The billions of dollars were used for non-business purposes.

Over 64,000 creditors claim more than RMB 14.6 trillion ($ 227 billion) in debt across 321 companies, according to a document confirmed by the FT. One creditor holds accountability for the lack of HNA oversight and sacrifices the public’s “hard-earned” savings and pensions in exchange for a manager’s “win” in completing the restructuring. I warned that it would be.

“This is a result that the CPC Central Committee and the state legislature never want to see!” A written complaint referred to China’s Supreme Leader. In the complaint, some creditors also alleged some of the misconduct of their managers and sought an investigation by the Central Commission for Discipline Inspection, an internal oversight group of the Communist Party.

HNA could not immediately seek comment on the creditor’s claim.

Some HNA creditors are afraid to publicly complain, and social media has emerged as a “fierce battlefield” between stakeholder groups, according to one of the creditors.

On a private group’s tense exchange seen by FT, creditors complained that the conditions under consideration were “ruthless” and that managers were “shameless.” Others said they felt forced to vote for the plan because it was the only chance to make a profit.

HNA was previously China’s most active international deal maker with the Hilton Hotel Chain Deutsche Bank’s largest single shareholding..

The group’s decline accelerated in 2017 as Beijing curtailed offshore cash flow and regulators from Bern to Wellington blocked transactions over questions about group governance and ownership.

HNA Chair Chen Feng and CEO Adam Tan were detained at the end of last month. The reason for their detention has not been revealed.Co-founder Wang Jian Fell in his death In France in 2018.

Analysts say Beijing handles HNA Evergrande bankruptcy potential..

Betty Wang, ANZ Senior China Economist, said: [Evergrande] In case of bankruptcy, HNA style bankruptcy restructuring may apply. “

“Conclusion — repeatedly emphasized [People’s Bank of China] — Protecting individual consumers and investors, ”she added.

Additional report by Emma Zhou in Beijing

HNA creditors rebel against Chinese conglomerate restructuring program

Source link HNA creditors rebel against Chinese conglomerate restructuring program

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