HNA chief steps into challenging role

Feng Chen becomes the sole chairman of HNA Group, overseeing the ongoing deleveraging of the conglomerate.

The abrupt death of Jian Wang in southern France has prompted his long-time business partner Feng Chen to take sole charge as chairman of HNA Group, the debt-saddled Chinese conglomerate that the two founded 25 years ago.

In a statement published on Friday, HNA Group said Chen will assume the duties of Wang, who died in a fall during a visit to Bonnieux, in the picturesque Luberon area of France.

The company will continue under the leadership of Chen and chief executive officer Adam Tan, HNA said in the statement.

For credit investors in HNA, the unexpected death of Wang convolutes the troubled group's efforts to offload its global assets to pay off its debt and could put more pressure on the management team to meet its financial goals after a $50 billion, three-year buying spree.

"HNA told creditors that the group's chief investment officer Wang Shuang will oversee the offshore debt, while chief executive officer Adam Tan will be responsible for its onshore debt obligations," according an investor who attended a conference call with HNA on Wednesday afternoon. 

"We understand it is a misfortune for the group and Mr Wang, but we also want to get the latest update of the group's latest financial condition given a change in key personnel," the investor said.

According to a separate source familiar with HNA, Chen is currently in France to take care of the deceased's personal affairs. Memorial ceremonies will be held in Beijing, Hong Kong and Haikou, the capital city of Hainan province, where HNA is headquartered. 

The company also said the ownership of Wang's 15% stake at HNA will be addressed in due course. He had pledged to give his personal stake to HNA Group’s New York-based non-profit Hainan Cihang Charity Foundation, the largest shareholder of the conglomerate.


HNA declined to comment for this story.

In the secondary market, the group's outstanding dollar and onshore renminbi-denominated bonds were largely unchanged on Friday. The 8.875% November 2018 bonds fell slightly by 0.136 point to 98.345, rebounding from a big sell-off on Wednesday, according to market data. The bonds dropped 2.5 points to 96.75 on Wednesday when the news of Wang's death broke out. 

Many analysts remain convinced that HNA is highly dependent on the decisions of the Chinese government.

"HNA is a kind of a company that relies on personal relationships with Chinese [state-owned] banks and government officials, in our view," Warut Promboon, an analyst at Bondcritic, an indepdent credit research firm, told FinanceAsia. "Wang's passing will definitely slow down the asset sale process but, in the long term, we do not believe the impact will be material."


Chen had for years been the public face of HNA Group, a closely held global aviation, logistics, retail and property, tourism and financial services empire that had amassed $94 billion of debt by the end of last year. His philosophy has become synonymous with the group’s rise from provisional airline carrier to one of the most acquisitive Chinese companies in history.

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