China’s HNA group has revealed concerns about its financial standing, Reuters reports, telling creditors that it may face a cash shortfall of at least 15 billion yuan ($2.4 billion) in the first quarter. The company is working on shedding some its assets to raise liquidity, but chairman Chen Feng is confident that HNA will adequately handle the situation.
HNA’s rising debt has called the attention of local banks, particularly after it recently failed to meet some debt obligations such as aircraft lease payments.
The Haikou-based conglomerate, whose services range from aviation to financial services, is taking fast and effective means to reduce its leverage, calling off deals and selling valuable overseas assets. Such measures have become necessary following the company’s $50 billion round of acquisitions over the last two years, a trend increasingly common among mainland companies.