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China's HNA Investment scraps $787 mln private placement plan
December 5, 2017 / 5:01 AM / 7 days ago

China's HNA Investment scraps $787 mln private placement plan

SHANGHAI, Dec 5 (Reuters) - China’s HNA Investment Group Co Ltd said it has scrapped a private placement plan worth 5.2 billion yuan ($786.57 million), as the sprawling HNA conglomerate comes under growing scrutiny from regulators.

The firm submitted a plan in May last year for the placement to 10 current investors, including controlling shareholder HNA Capital Group Co Ltd, which in turn makes up about a third of the overall HNA Group Co Ltd.

But it did not gain approval for the plan from the China Securities Regulatory Commission (CSRC) and has now withdrawn its placement application, HNA Investment said in a statement to the Shenzhen stock exchange late on Monday.

“After taking full consideration of the progress of approval, the company’s current situation, future development planning and the capital market environment, the company decided to terminate the private share offering ... and withdraw the application from the CSRC,” HNA Investment said.

“The termination of this private placement plan will not have a substantive impact on production and operations,” it said. The interests of shareholders have not been harmed, it also said.

The broader HNA group, which is involved in industries as diverse as aviation and financial services, has announced deals over the last two years worth more than $50 billion, including sizable stakes in Hilton Worldwide Holdings Inc and Deutsche Bank AG.

But it has come under increasing regulatory scrutiny amid questions about its opaque ownership structure and use of leverage. On Monday, the Sueddeutsche Zeitung reported that German authorities were investigating HNA’s disclosures when it was building its Deutsche Bank stake.

HNA Group is also involved in a high-stakes legal dispute with Guo Wengui, an exiled Chinese businessman who has claimed the group is tied to Communist Party officials and their family members. ($1 = 6.6110 yuan)

Reporting by David Stanway; Editing by Christopher Cushing

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