Skift Take

HNA has become an example of what happens when appetites get out of control. The conglomerate is looking to sell off billions of dollars of assets as it works to get its debt under control.

HNA Group Co. is in talks to sell a fleet of private jets, including a $70,000-an-hour retrofitted Boeing 787 and some planes reserved for its leaders, as the debt-laden Chinese conglomerate continues to grapple with liquidity challenges, according to people familiar with the matter.

HNA is offering to sell dozens of private jets operated by subsidiary Deer Jet Co. to potential buyers, the people said, asking not to be identified discussing a private matter. The luxury planes, many of which were rented out to ultra-wealthy fliers, include models from Airbus SE, Bombardier Inc, Dassault Aviation SA, and Gulfstream Aerospace Corp., according to the people.

Also up for sale: Deer Jet’s flagship Dream Jet, according to the people. The Dream Jet is a widebody plane equipped with amenities such as a bedroom, dining area, and kitchen that can be chartered for the price of a Porsche 718 Boxster S — every hour.

While the jets would hardly fall among the biggest assets that HNA has sold, they’re a symbol of an era when the group was splurging on everything from over-the-top parties in French museums to some of the most expensive homes in Manhattan and Hong Kong. Up until last year, HNA was one of China’s biggest buyers of foreign assets, even though profits stood at only about 0.2 percent of assets and debts were soaring.

Then HNA’s borrowing costs began catching up with the company, forcing it to reverse its free-spending ways. This year alone, it’s agreed to sell more than $22 billion in properties and shares to stay in business, according to a Bloomberg tally. The company is also said to be in advanced talks to sell its Swiss airport-cargo handler, exit its investment in Deutsche Bank AG and look for a buyer for its $1 billion container-leasing business Seaco.

A representative for HNA declined to comment.

No deal has been reached and there’s no guarantee that the planes will be sold, the people said.

HNA had previously considered selling a stake in Deer Jet, whose fleet of 82 planes makes it Asia’s biggest private jet operator, but it shelved those plans, the people said.

©2018 Bloomberg L.P.

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November 16, 2022
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Tags: hna group, luxury

Photo credit: HNA is mulling a sale of its luxury jet fleet, pictured here. Bloomberg