September 1, 2017 / 10:29 AM / a year ago

China's HNA Group reports $29 billion jump in assets, bank loans soar

BEIJING, Sept 1 (Reuters) - China’s HNA Group Co reported a 190.4 billion yuan ($28.99 billion) rise in total assets in the first half of 2017, following its acquisition of Ingram Micro Inc, Gategroup and CIT’s aviation leasing business.

The sprawling aviation-to-financial services conglomerate also said in a semi-annual bond disclosure filing that it has used 454.5 billion yuan of its 745.2 billion yuan total credit line.

That compared with 369.1 billion yuan used from 611.4 billion yuan in credit lines reported at the end of 2016.

Friday’s filing provides a rare overview of the underlying financial situation of China’s most active non-government player in global markets.

HNA has announced deals over the last two years of more than $50 billion, which includes taking sizable stakes in Hilton Worldwide Holdings Inc and Deutsche Bank.

The company also now faces increased scrutiny, as regulators and bankers question the group’s opaque ownership structure and use of leverage.

HNA also is locked in a high stakes legal dispute with Guo Wengui, an exiled Chinese businessman, who has claimed that the group is tied to Communist Party officials and their family members. HNA rejects the accusation and in June filed a defamation lawsuit against Guo in New York.

In July, the company for the first time published a list of its shareholders, and announced the creation of a New York-based charity to hold 29.5 percent in the company.

In Friday’s filing, HNA said that its finance costs more than doubled to 14.19 billion yuan for the period, from 6.48 billion yuan over the same period last year. The company reports 7 active on-shore corporate bonds with 14.25 billion yuan outstanding.

Net profits for the group amounted to 812 million yuan for the first six months of the year, compared with 554 million yuan in the same period a year earlier.

The company said that operating income reached 265.1 billion yuan for the six-month period, compared with 48.5 billion yuan for the same period in 2016, as acquisitions began to make an impact.

HNA’s operating costs also soared during the period to 231 billion yuan, from 34.8 billion yuan the same period last year.

The group reported that its long-term borrowing reached 291.5 billion yuan, an increase of 62.77 billion yuan over the start of the year.

Non-current liabilities due within one year, including bonds, loans and payables, inched up to 29.4 billion yuan, the filing said.

HNA Group CEO Adam Tan told Reuters in July that he continued to have a strong working relationship with Wall Street banks, including JPMorgan and Morgan Stanley, and pushed back against reports that some were scaling back credit. ($1 = 6.5670 Chinese yuan renminbi) (Reporting by Matthew Miller and Shu Zhang)

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