https://www.wsj.com/articles/chinas-hna ... 1513187628
"Troubles are also bubbling up in some of HNA’s aviation-related units. The management of Hainan Airlines Holding Co. Ltd., a HNA unit that is a majority shareholder in more than a dozen HNA-affiliated airlines, has held internal discussions in recent weeks to determine which lessors the airlines should make lease payments to first, said a person familiar with the matter. A HNA spokesman had no immediate comment."
BestWestern wrote:The issue is that HNA group has overpaid for their assets, so sale of them won’t pay down all the debt. Zero sum game.
To raise money selling assets:
1. Buy low and sell high (not HNA group)
2. Pay off debt at a quick pace so that assets have a cash out value greater than the debt (not HNA group)
3. Sell to a lucky high bidder (which was HNA group).
In an auction system, uneducated buyers overpay:
"The winner's curse is a phenomenon that may occur in common value auctions with incomplete information. The winner's curse says that in such an auction, the winner will tend to overpay."
Being selectively late with lease payments is a bad sign. I realize it can be a negotiating tactic, but I doubt it. The group fundamentals are so poor that this house of cards would fall apart in a free economy.
https://www.ch-aviation.com/portal/news ... -lucky-air
Wow.... HNA's 'reassurance' is scary:
Of credit lines of 800 billion yuan ($120.9 billion USD), 490 billion yuan are used. That isn't much cushion! Not for a holding company. (See the first link of this post).
IMHO, the company is functionally bankrupt, but is being allowed to continue operating.
Expect high praise of the C919 in the future.