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HNA Group Says It Has ‘Reached The Point Of Life And Death’ Amid COVID-19 Pandemic
‘HNA’s problems accumulated over time and it is indeed difficult to solve the problems overnight,’ HNA wrote in an unsigned letter posted to its official Chinese social media account.
Chinese air carrier HNA Group announced via social media that it had “reached the point of life and death,” due to the revenue impact from the coronavirus, according to the Financial Times.
“This is a big test for all HNA employees. Now HNA has reached the point of life and death,” it wrote in an unsigned letter posted to its official Chinese social media account that was translated by the Financial Times.
HNA Group is the owner of Irvine, Calif.-based IT distributor Ingram Micro.
The letter was also critical of its own finance department, just one day after the company had to quiet another kerfuffle over delaying payment of its bonds. The heavily indebted HNA Group had a Beijeing-appointed executive chairman, Gu Gang, named to oversee its liquidity issues in February, the Financial Times said.
“The finance department has not followed the requests of the company to carry out smooth communication with its investors, doing its work hastily and without sincerity,” the HNA letter said. “Gu Gang emphasised that HNA’s problems accumulated over time and it is indeed difficult to solve the problems overnight,” the letter read.
Ingram Micro CEO Alain Monie has gone to great lengths to reassure the company’s partners that HNA Group’s financial woes will have no bearing on Ingram Micro’s business. In a Feb. 25 letter to partners, he said the company is “ring-fenced” from influence by its Chinese ownership.
“Ingram Micro operates as a separate stand-alone company that is not and cannot be integrated with HNA. This is mandated by the U.S. Government and has effectively insulated our company from HNA to minimize impact from any issues that may be experienced by HNA or its affiliates. Separately, under the agreements with our lenders, we maintain a fully independent debt portfolio to fund our business with absolutely no reliance on guarantees or any type of support from HNA.”
Travel restrictions as a result of the coronavirus have put severe pressure on the air carrier. One analyst told the Financial Times that internal management of the company was in “chaos.”
“HNA is currently facing many problems in both asset disposal and its daily operations,” Shen Meng, director at Chanson & Co, told the paper. “These huge operating pressures have led to a breakout of internal management chaos.”
A call to a U.S.-based representative for HNA was not immediately returned.