Hainan Airlines Holding revealed in a disclosure on February 9 that it expects to restructure interest-bearing debts amounting to no less than CNY72.5 billion yuan (USD11.27 billion) by transferring them to affiliates, including HNA Group, in order to get them to repay.
“If the bankruptcy court accepts that the interests of listed small and medium-sized shareholders will not be harmed, the plan will be settled and the amount of 72.5 billion yuan transferred,” the Shanghai Stock Exchange filing said.
After its creditors applied for Hainan Airlines Holding’s bankruptcy and restructuring on January 29, the Hainan Airlines (HU, Haikou) parent pledged in the disclosure that it would put in place a plan to dispose of its debts.
If there is a problem in the implementation of the debt transfer plan, it added, then the government of China’s Hainan Province, where the company is based, will work with the relevant parties to resolve it.
Hainan Airlines Holding said in the filing that it had “fully communicated” with its creditors and that it had sent its plan to 203 of them to solicit opinions. Of these, it claimed that 147 creditors (66.82%) had agreed to the debt transfer plan in writing, accounting for 81.24% of the total creditors’ rights, enough to implement the debt transfer as it exceeded the two-thirds majority stated in the company’s Creditor Committee Rules of Procedure.
The proportion of ordinary interest-bearing creditors of Hainan Airlines Holdings who agreed in a written reply was 69.66%, representing 84.87% of the amount owed.
This meant, the company summarised, that the proportion of creditors who agreed to the plan accounted for about 72% of Hainan Airlines Holdings’ estimated total interest-bearing debts, also more than the two-thirds majority needed for the plan to be approved.
