HNA plans to sell $1.9b stake in Park Hotels

BEIJING • HNA Group Co put its US$1.4 billion (S$1.9 billion) stake in Park Hotels & Resorts up for sale, the latest in a slew of asset disposals to have emerged as the Chinese conglomerate scrambles to repay mounting debts.

The sale could involve some or all of HNA's 53.7 million shares, with any disposal being subject to market conditions, according to a regulatory filing in the US.

HNA bought a quarter of Hilton Worldwide Holdings and two spin-offs - Park Hotels and Hilton Grand Vacations - from Blackstone Group last year for about US$6.5 billion. Those stakes are valued at more than US$9 billion today.

Park Hotels' last close of US$25.93 is similar to what HNA got the shares for less than a year ago. The value of HNA's Hilton Worldwide stake has soared about 40 per cent to US$6.6 billion since the purchase, but those shares are locked up until next year, according to Bloomberg data. Hilton Grand Vacations is up 58 per cent to US$1.1 billion.

The move comes as the once little-known airline operator is actively seeking to dispose assets globally to repay debts after it spent tens of billions dollars in a debt-fueled buying spree that included stakes in Deutsche Bank and skyscrapers in New York.

SOME OF GROUP'S ASSETS

The value of HNA's Hilton Worldwide stake has soared about 40 per cent to US$6.6 billion since the purchase, but those shares are locked up until next year, according to Bloomberg data. Hilton Grand Vacations is up 58 per cent to US$1.1 billion.

The group is said to have told creditors in January that it could have a liquidity shortfall of at least 15 billion yuan (S$3 billion) this quarter and that it's targeting about 100 billion yuan in asset sales in the first half of the year.

Park Hotels' portfolio of properties include the Hilton San Francisco Union Square and the New York Hilton Midtown.

Park Hotels could be the biggest HNA share sale that's emerged since late last year, when chief executive officer Adam Tan announced a reversal in the group's acquisition spree. In recent weeks, the conglomerate has put up for sale its 29 per cent stake in Spanish hospitality firm NH Hotel Group.

Other assets the company is planning to sell or has sold include Red Lion Hotels Corp, US shipping company Dorian LPG and China Dragon Securities Co.

Meanwhile, the group is planning initial public offerings for Gategroup Holding and Swissport International in Switzerland.

HNA still has more than US$25 billion of shares - including Park Hotels - data compiled by Bloomberg showed. Beyond stock, it has been pursuing disposals of its real-estate properties worldwide. This year, it agreed to sell a Sydney office building and two plots of land in Hong Kong. It is said to be putting up its raft of US properties valued at US$4 billion.

BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on March 03, 2018, with the headline 'HNA plans to sell $1.9b stake in Park Hotels'. Print Edition | Subscribe