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HNA receives $568m loan. Will it go to Hong Kong Airlines?

12/03/2019| 10:09:52 AM|

The lead bank in the loan is China Development Bank, which has been overseeing HNA’s restructuring.

The HNA Group announced Monday night it reached a four billion yuan (US$568 million) loan with state-owned banks. Earlier in the day, Hong Kong authorities ordered HNA’s Hong Kong Airlines to boost finances by Saturday or face a review that could possibly include license suspension.

HNA said the loan would be used to pay staff salaries, aircraft leases, fuel, airport charges and other costs at HNA affiliates without specifying the exact companies. Of particular irk to Hong Kong is that Hong Kong Airlines last week said it would not pay the November salaries for some staff until December 6. Hong Kong on Monday imposed December 7 as the date by which it would review the airline. Hong Kong Airlines was previously taken to court for unpaid aircraft leases, while it is understood payment is in arrears for some airport and fuel charges.

Hong Kong’s Air Transport Licensing Authority, which oversees airlines, imposed on Monday two conditions on Hong Kong Airlines’ license. The airline must receive a cash injection at an undisclosed level set by ATLA, and then raise and maintain cash and cash equivalents, also at an undisclosed level.

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TAGS: HNA Group | Hong Kong Airlines
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