China plans to take over indebted conglomerate HNA Group Co. and sell off its airline assets, the most dramatic step to date by the state to contain the deepening economic damage from the deadly coronavirus outbreak, reported Bloomberg.
The government of Hainan, the southern island province where HNA is based, is in talks to seize control of the group after the contagion hurt its ability to meet financial obligations, according to Bloomberg sources.
As President Xi Jinping seeks to prevent the short-term economic pain caused by the coronavirus from turning into a slump that outlasts the contagion, his government is considering direct cash infusions or mergers to stabilize the hobbled airline industry, while the People’s Bank of China said it will work on supporting domestic consumption. A takeover of a high-profile company like HNA would take those efforts to a new level.
Under the emerging plan, China would sell the bulk of HNA’s airline assets to the country’s three biggest carriers — Air China Ltd., China Southern Airlines Co. and China Eastern Airlines Corp.