Hainan Airlines faces growing regulatory scrutiny from Beijing that threatens to spook bond investors and raise its financing costs when most of the shares pledged to fund its buying spree are declining. If the value of its collateral falls enough, HNA could be forced to sell its holdings to repay debt.
HNA and its units have pledged at least US$24 billion (HK$187.2 billion) of shares across 15 publicly traded firms. HNA-related entities also have pledged billions more of unlisted assets. Shareholders pledged a 17 percent stake in the group's closely held parent.
HNA said pledging of shares isn't its only source of financing. Its business operations, asset quality and cash flows allow it to pursue a range of financing options, the company said.