HNA Group plans to raise 10 billion in private placement for its Grand China Air’s listing in Hong Kong, reports Economy and National Weekly, citing insider information.
 
HNA Group is reportedly about to appraise its several regional airline companies’ assets.
 
HNA Group also plans to bundle some its real estate business with Grand China Air to offset the latter’s highly cyclical risks.
 
The Hong Kong listing plan starts with the integration of its airline assets, followed by financing of the issuance via private placement.
 
Two regional airline companies, West China and Tianjin Airlines, have current appraised value of five billion yuan, which will be injected into Grand China Air.
 
In 2009, HNA Group’s airline business incurred a loss while generating sales revenue of 2.14 billion yuan.
 
At present, HNA Group is using debt financing to buy regional aircrafts to boost their capabilities.
 
After the injection, HNA Group will have 24.07 percent stakes in Grand China Air, whose biggest shareholder is the State-owned Assets Supervision and Administration of Hainan Province.
 
In 2009, Grand China Air cashed in 19.7 billion yuan in sales revenue and 220 milion yuan in net profit and its major asset is 41.6 percent stake in Hainan Airlines Company, which also contributes 90 percent of Grand China Air’s annual sales.
 
Shares of Hainan Airlines Company (600221) shed 2.47 percent to trade at 8.68 yuan per share at 14:14 today.
 
 
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