Bonds Apr 15

HNA Group secures a short reprieve over bonds

Group apologised and called a meeting of creditors to extend the term on its 13 and 15 series bonds

HNA Group secures a short reprieve over bonds
An aerial view of HNA Building, also known as the New Haihang Building, which is the headquarters for Hainan Airlines and the HNA Group, is shown at Haikou city, in southern China's Hainan province. Photo: Imaginechina via AFP

(ATF) The struggling HNA Group had to issue a public apology on its WeChat account after telling investors yesterday that it plans to negotiate over the “13 HNA Bonds” – which have payments due today (April 15) – to extend the maturity of the principal and interest for one year. Its redemption plan is subject to the consensus of the investors.

In the letter of apology, HNA Group explained that the reason it wants to negotiate an extension for the bond payments was the impact of the coronavirus.

HNA Group’s main business operations such as aviation, tourism, hotels and commerce are all suffering. In the short term, it is difficult to restore operations to level enjoyed in the same period last year. So, its cash-flow pressure is huge.

At the end of the open letter, HNA Group said that after the vote at its creditors' meeting is completed, the company will faithfully disclose relevant information. In the future, “we will learn from this experience and disclose relevant information more openly and transparently to protect the legitimate rights and interests of investors,” it said.

Some 1.15 billion yuan worth of HNA Bonds were issued on the Shanghai Stock Exchange on April 15, 2013. They had a coupon rate of 7.1%, and a term of 7 years. Investors were due to get their principal and interest on the expiry date – April 15, 2020 (today).

On April 9, HNA announced that it had applied for suspension of trading due to major issues that would be confirmed on April 15.

According to the China Economic Observer, on the evening of April 14, HNA Group called bond holders to a meeting and asked investors to vote for the bond to be extended – for one year. 

Some investors condemned the company for not obeying the rules relating to bond holders and their meetings.

Despite that hullaballoo, HNA Group secured two temporary suspensions – for its 13 and 15 bond series.