The first batch of 62 companies under HNA Group, including three listed companies, has entered bankruptcy restructuring, said the company on Saturday.

 

The three listed companies, HNA Holdings, HNA Infrastructure and CCOOP Group Co Ltd, cover aviation, infrastructure and investment, as well as commodity circulation.

 

HNA Group, parent company of Hainan Airlines, said on Friday it had received notice from the Hainan High People's Court that creditors had sought the company's bankruptcy restructuring due to failure to repay debts.

 

HNA said it will cooperate with the court's review, push forward debt restructuring. It will also support the court's efforts to protect the legitimate rights and interests of the creditors and ensure normal operations of the company.

 

HNA has more than 2,000 companies, 90 percent of which are shell companies, and only around 200 companies are in real business operations, said an executive of HNA, who declined to be named.

 

The first batch of 62 companies is part of the 200 companies, taking up nearly 60 percent of the group’s total debts, the source said.

 

The second phase is expected to involve about 400 companies into bankruptcy and restructuring, which are estimated to take up 85 percent of debts of HNA, according to the source.

 

The executive said the bankruptcy restructuring would not affect HNA's aviation business, which comprises of 14 companies and operates 700 commercial aircraft and is the country's fourth-largest air carrier.

 

The group has taken measures to lower its debts and has plans to bring new investors in an effort to return to healthy development, said the source.

 

Gu Gang, Party secretary of HNA Group, wrote a letter to the 100,000 employees of HNA on Friday that the objective of the plan is not bankruptcy, but to reconstruct.

 

HNA has controlling stakes in 18 listed companies.