HNA in talks to find buyer for CWT logistics unit

China's HNA Group is in talks with investment banks to find a buyer for its CWT logistics unit, nine months after it acquired the Singapore-based business in a US$1 billion (S$1.37 billion) deal, people familiar with the matter told Reuters.

The sale, if completed, would be the latest in a series of divestments aimed at slashing debt at the aviation-to-financial services conglomerate. HNA has attracted much scrutiny for its US$50 billion worth of deals in recent years that included hotels in the United States and a stake in Deutsche Bank.

For CWT, HNA is targeting a non-Chinese buyer, three sources said. Another person said only a part of CWT would be put up for sale. The sources declined to be named as HNA's talks with banks for a buyer were confidential. "Some parties are conducting due diligence on CWT," said one source.

An HNA spokesman declined to comment.

The group completed the acquisition of CWT last December via a wholly owned subsidiary, HNA Belt and Road Investments Singapore.

The CWT business, spread across 90 countries, was folded into one of HNA's listed units in Hong Kong that was renamed CWT International. Besides logistics, CWT operates a commodity marketing business and also provides engineering services primarily in Singapore through a subsidiary.

In July, Hong Kong-listed CWT International said it had entered into a pact to sell and lease back five warehouse properties in Singapore for US$533 million.

CWT International also said in its interim results that it had "certain borrowings", raised to fund the purchase of CWT, due this month that it would be unable to repay unless it was able to get "sufficient cash sources" through refinancing.

Recent asset sales by HNA, which counts Hainan Airlines as its core business, include holdings in firms such as Hilton Worldwide Holdings, Park Hotels & Resorts and Spain's NH Hotels. Last month, Japan's Orix Corp struck a US$2.2 billion deal to buy a 30 per cent stake in HNA's aircraft leasing firm Avolon Holdings.

HNA is also open to selling its stakes in Deutsche Bank, airline Virgin Australia and shipping container leasing firm SeaCo, according to separate sources.

Assets not related to HNA's core aviation business are being sold, several people close to the group have told Reuters.

The conglomerate's total debt stood at US$96 billion at the end of the first half of this year.

REUTERS

A version of this article appeared in the print edition of The Straits Times on September 20, 2018, with the headline 'HNA in talks to find buyer for CWT logistics unit'. Print Edition | Subscribe