China took over management of debt-laden HNA Group’s liquidity risks after the coronavirus outbreak scared off travelers and cut off the conglomerate’s main source of income, forcing the government to take extraordinary steps to contain the fallout from the epidemic, reported Caixin.
The government of Hainan, the southern island province where HNA is based, appointed an executive chairman for the company and set up a working group of officials from the municipality, the civil aviation authority and China Development Bank to oversee the effort, HNA said in a statement on Saturday. The move came after the conglomerate failed to resolve liquidity difficulties that stretch back to late 2017, it said.
The government rescue of the fallen giant — it was once the top shareholder of iconic companies such as Hilton Worldwide Holdings and Deutsche Bank AG — makes HNA one of the biggest corporate casualties of the outbreak. To limit the economic impact of the virus China is considering bailing out the hobbled airline industry and the People’s Bank of China has said it will work on supporting domestic consumption.