Troubled Chinese airline group proposes paying 40% of debts

HNA Group, a Chinese airline operator that ran into financial trouble after a global acquisition spree, has proposed a plan to settle $61 billion in debts owed to thousands of creditors by paying 40% of the total

BEIJING — HNA Group, a Chinese airline operator that ran into financial trouble after a global acquisition spree, has proposed a plan to settle $61 billion in debts owed to thousands of creditors by paying 40% of the total.

The conglomerate warned in a statement Tuesday that it faces possible liquidation due to “mismanagement and investment disorder.” HNA Group said Friday its chairman and CEO were detained by police on suspicion of unspecified crimes.

The repayment plan, released Tuesday by HNA’s publicly traded Hainan Airlines Holding Co. subsidiary, said an administrator has asked a court to confirm the company is obligated to pay 161.2 billion yuan ($25 billion), or about 40% of the 397.2 billion yuan ($61 billion) claimed by 4,915 creditors.

Creditors would receive shares in Hainan Airlines and no more than 100,000 yuan ($15,500) in cash to settle one-third of the debt, the plan said. It said HNA Group and related companies will be responsible for two-thirds of the remaining debt.

HNA Group said Friday its chairman, Chen Feng, and CEO, Tan Xiangdong, were “taken under compulsory measures” by police due to “suspicion of crime.” It gave no details but said operations “are not affected.”

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