I realize most of the discussion here is relating to american companies and stocks, and also not really macro related. With that said, I've been following along to things relating to this Chinese company for a little while and wanted to share since I haven't seen any discussion on it despite how much of a global impact there could be here. With a 200 billion dollar market cap and stakes in other major companies like the struggling Deutsche Bank, if it were to go under, it would be a pretty big shock to the world. Now, I'm not going to tell anybody to try timing the market off this, but I feel there should at least be some discussion around this.
Who is HNA Group?
They're a Chinese conglomerate that has risen from being a small airline, to one of China's largest conglomerates with stakes in assets almost everywhere in the world. They have (before selling some assets recently) the largest stake in Deutche Bank, which was at one point worth just short of 10 billion, and is now valued at 8.8 billion. They also own 25% of Hilton worldwide.
The aviation-to-financial services conglomerate has faced a cash crunch since the end of last year, after signing deals worth more than $50 billion over a two-year period, including leading stakes in Hilton Worldwide Holdings (HLT.N) and Deutsche Bank AG (DBKGn.DE).
Basically, they're failing to make payments to their creditors, their shares in all their subsidiaries have been frozen in China for over a month, and they are selling off assets in a fire-sale manner so that they can attempt to stay solvent. Things have gotten so bad that they were trying to pull money from... their employees of all things... (https://www.nytimes.com/2018/02/01/business/dealbook/hna-china-employees.html)
Furthermore, they seem to have a very shady organizational structure, in which they have been pumping money into a New York Charity that was started by someone related to their company (https://www.nytimes.com/2017/07/26/business/hna-group-billion-donation-new-york-charity.html).
There is a lot of reading that can be done on them, but here are a few more links.
The major caveat here of course, is that sometimes China is different, especially if a company has any political ties to the communist party. In this instance, even if they were in a scenario where they would go under in a democratic country, the communist government of china may save them for the sake of stability.
On the other hand, Jinping has been trying to crack down on a lot of the issues here such as capital flight, and extensive credit creation, and has been said to be of the mind to let companies fail so they do not just take on debt incessantly with the mindset that they government will bail them out regardless of what happens.
Submitted February 15, 2018 at 11:35PM by cbus20122 http://ift.tt/2EqhTB1
