Trading in a bond issued by China’s HNA Group was suspended in a sign of how liquidity problems at the heavily indebted conglomerate have worsened after the coronavirus pandemic buffeted capital markets, reported the Financial Times.
The Shanghai stock exchange said in a statement on Wednesday that trading in the seven-year, RMB 3 billion ($425 million) bond — issued by the company in 2015 — was initially halted shortly after the market opened due to “abnormal fluctuations”. After a brief resumption, trading was again stopped after the bond fell below 30% of its par value.
The volatility came after HNA called a last-minute teleconference on Tuesday night to tell its investors of its intention to delay by a year both principal and interest payments for a separate bond issued in 2013 that had been due on April 15. On Wednesday, HNA publicly apologized for failing to give advanced warning of the meeting.
HNA, based in southern China’s Hainan province, is best known for its high profile debt spree in 2015 and 2016 in which it spent billions of dollars on assets including stakes in Deutsche Bank and Hilton Worldwide. It also controls Hainan Airlines, China’s fourth-largest carrier.