The parent of Hainan Airlines Co. (600221.SH), China’s fourth-biggest airline by revenue, said Monday it is bidding for Frankfurt-based construction firm Hochtief AG’s (HOT.XE) airport assets, which it believes to be valued at more than EUR1 billion.
 
The bidding is the latest development in Hainan provincial government-backed HNA Group Co.’s push to expand overseas amid falling global asset prices. Last week, the unlisted company said it was joining Hong Kong’s Bravia Capital to buy a shipping container lessor co-owned by General Electric Co. in a deal valued at US$1.05 billion. In July, HNA, which owns a majority stake in Hainan Air, disclosed plans to buy a stake in Turkish air cargo carrier ACT Airlines.
 
Adam Tan, an executive director at HNA Group, said its unit HNA Airport Group is among the four to five bidders that have been short-listed to move to the second round of bidding for Hochtief’s airport assets. The assets include stakes in airports in Athens, Budapest, Dusseldorf, Hamburg, Sydney and Tirana, Albania.
 
"The deal may have to go through another round of bidding and we expect the seller to assign a winning bidder within two months," Tan said.
 
People familiar with the situation said last month that other bidders in the assets include airport operator Fraport AG (FRA.XE) and its bidding partner, Deutsche Bank AG’s (DB) infrastructure fund RREEF, as well as French construction company Vinci SA (DG.FR).
 
Tan said the recent stock market volatility and a slower global economic recovery amid lingering concerns about the health of the U.S. economy and the European debt crisis won’t deter the group’s plan to expand abroad.
 
The Chinese conglomerate, which has businesses spanning airlines and airport operations, hotel management and logistics, has also been stepping up its efforts to tap the equity markets in recent years.
 
Its aviation investment arm Grand China Air, which counts billionaire financier George Soros as a major shareholder, holds major aviation assets including Hainan Airlines and Hong Kong Airlines Ltd. Both Grand China Air and Hong Kong Airlines are considering share listings, the company said earlier. Soros-backed American Aviation Ltd. also directly owns a stake of around 2.62% in Hainan Airlines.
 
Tan said the company will need to invest a total of around US$500 million to US$600 million from its internal capital for the three overseas transactions, with the rest to be funded by bank facilities.


SOURCE: online.wsj.com

 
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