China's HNA CEO denies banks scaling back credit

Published : July 24, 2017 Updated : July 24, 2017

By Matthew Miller and Rachel Armstrong

 

LONDON (Reuters) - HNA Group CEO Adam Tan has pushed back against media reports that the Chinese aviation-to-financial services conglomerate faces mounting pressure from its bankers and regulators, even as the pace of its acquisitions slows.

 

Tan told Reuters in a wide-ranging interview on Monday that HNA maintains a strong working relationship with its main Wall Street banks, which include JPMorgan <JPM.N>, UBS <UBSG.S> and Morgan Stanley <MS.N>, and reports that some were scaling back credit to the group were not true.

 

"I think we are operating our company legally, we have nothing to hide, and we are fine," Tan said. "I talk to my Chinese authorities, I think they are happy. Life goes on."

 

He said Morgan Stanley had given HNA an unsecured $300 million loan just three weeks ago. Morgan Stanley declined to comment.

The only bank that has stopped working with HNA is Bank of America Merrill Lynch, Tan said, adding the bank had not dealt closely with HNA to begin with.

Tan characterized as routine a loan check by banks ordered last month by the China Banking Regulatory Commission (CBRC), adding this was not a major hindrance to the group's business, given it had already been subject to regular scrutiny the CBRC.

"I've been reviewed by them (the CBRC) for more than 10 years," Tan said, adding that it was just one of many regulators the company dealt with.

China's banking regulator ordered a group of lenders to assess their exposure to offshore acquisitions by a handful of companies that have been on an overseas buying spree.

Tan also said he had not had contact with the European Central Bank, which is considering a possible assessment of Deutsche Bank's two largest shareholders, including the Qatari royal family.

"I think the German government clearly said it welcomes all ... kinds of investment," he said. "Our investment is legal and is totally controlled by the regulatory process."

HNA, which has announced $50 billion or so of deals over two years, continues to move forward with transactions even as its acquisition spree slows, Tan said, pointing to a recent $19 million deal that saw an HNA subsidiary agree to buy a 60 percent equity stake in Rio de Janeiro international airport from Odebrecht SA.

Tan said he was unaware of a timeline to close HNA Capital's proposed buyout of SkyBridge Capital, the hedge fund platform founded by newly installed White House communications director Anthony Scaramucci. The regulatory process may take more than a few weeks, he added.

Separately, Tan said that HNA revenue had increased by an estimated 199 percent in the first half of the year, while profits were up more than 40 percent, without providing detailed numbers.

"If I do nothing, in a year's time my Fortune 500 company ranking will be inside the top 50," he said.

Fortune said earlier on Monday that HNA had moved up in the Fortune 500 ranking this year to 170th from 464th.

(Reporting by Matthew Miller and Rachel Armstrong, with additional reporting by Olivia Oran in NEW YORK; Editing by Ian Geoghegan)

 
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