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HNA Group Co. held preliminary talks to sell its core airline assets to one of China’s top state-run carriers, people familiar with the matter said, a sign little has been off the table as the sprawling conglomerate seeks to pay down its hefty debt load.

The talks, which haven’t been previously reported, started late last year, the people said, asking not to be identified discussing a private matter. The state-run parent of Air China Ltd. held at least two high-level meetings to buy HNA assets including flagship Hainan Airlines Holding Co., they said. But discussions have cooled in the past few months and it’s unclear whether they will progress because of numerous hurdles, according to the people.

HNA, which declined to comment on Wednesday, subsequently denied any such discussions occurred.

“Hainan Airlines is not for sale, full stop, and never was, and even the general conversations in question about other airline assets under Hainan Airlines Holding took place months ago,” HNA said in a statement to Bloomberg.

Selling Hainan Airlines would have been unthinkable up until a few years ago because the carrier was HNA’s first company and it’s remained the group’s most central business for the past quarter century. But pressure on HNA to deal with its debt, one of the biggest burdens in Asia, has forced it to embark on a massive selloff. The company, based in Hainan island off China’s southern coast, agreed to sell more than $20 billion in assets this year and more than double that remains on the block, according to a Bloomberg tally.

The Air China side made initial contact late last year after getting an endorsement from the industry regulator, Civil Aviation Administration of China, the people said. Discussions involved buying airline assets that went beyond the listed Hainan Airlines holding company, they said.

Air China said it’s not aware of any such discussions and that it has nothing to disclose regarding the matter. Representatives at the aviation regulator couldn’t immediately comment.

Bloomberg News, ©2018 Bloomberg L.P.

Up until last year, HNA had been at the forefront of a global debt-fueled buying binge by Chinese acquirers who gobbled up everything from famous Manhattan properties to Hollywood studios and other high-profile assets worldwide. Then the government began reining them in and today, many of these Chinese trophy hunters such as Anbang Insurance Group Co. and Dalian Wanda Group Co. are hunkering down by selling assets worldwide.

HNA, whose total debts exceed $78 billion, had grown so large that it was one of the few private companies in China that the nation’s central bank designated as potentially posing a systemic risk to the nation’s financial system. With triple the debt of fellow conglomerate Fosun International Ltd., HNA is particularly exposed to the government because much of its dues are owed to state lenders such as China Development Bank, which continue to provide lifelines to the embattled company.

Banks are also under pressure to recoup loans as a slew of corporate defaults and the prospects of a trade war with the U.S. have left the outlook for the economy uncertain.

Separately, Hainan Airlines received inquiries from the Shanghai Exchange regarding five announced connected transactions between Hainan Airlines and other HNA units, according to a company statement on Thursday. The bourse posted questions and asked for more details over the rationale of the transactions, costs, pricing, financing and payment process.

©2018 Bloomberg L.P.

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Photo Credit: A Hainan Airlines 787. Air China Group reportedly held talks with HNA about buying assets including flagship Hainan Airlines. Lord of the Wings© / Flickr