China’s HNA misses bond repayment, blames system glitch
Finances show strain despite $12bn in asset sales
Chinese aviation-to-finance conglomerate HNA failed to make full payment on a domestic bond issue on Friday, in what the company said was a glitch in the money transfer system.
The Shanghai Clearing House said on Friday that it had not received payment on a 270-day bond issued by Haikou Meilan International Airport Co, a unit of HNA. The Rmb1bn ($460.1m) bond issued in November last year carried an annual interest rate of 7.3 per cent.
HNA said it had completed an interest payment of Rmb54m, but “because the transfer system was down, we were unable to transfer the Rmb1bn”. It apologised and said the payment would arrive by Monday morning.
The payment delay comes as HNA continues to show strains on its finances despite about $12bn in asset sales this year.
In the past two months, HNA announced asset sales of almost $3bn, according to company statements and data from Thomson Reuters. That is in addition to $9.4bn in asset sales in the first half of 2018, helping it to navigate the liquidity crisis that rocked the group in the fourth quarter of 2017.
Late last month, HNA shut a P2P exchange that it had used to raise money from retail investors. Earlier this month it missed payments due on some interest-bearing products issued through P2P platforms. HNA has said it will repay those in full, on an extended schedule.