Report by : Gan Yung Chyan
/ KUCINTA SETIA
Following Capital Airlines, Urumqi Air and GX Airlines, West Air owned by HNA has received state-owned support.
In the afternoon of 2 December 2019, HNA Group and Chongqing Yufu Asset Management Co., Ltd. (hereinafter referred to as "Yufu Group") signed the "Agreement on Strategic Restructuring of West Air" . Both parties agreed to restructure equity of HNA's West Air.
After the completion of the strategic reorganization, Yufu Group or its designated enterprises have a total shareholding of not less than 70 per cent, thus becoming the largest shareholder of West Air, while the aviation operation of HNA will continue to oversee the production and operation of HNA.
At the signing ceremony, Chen Feng, chairman of HNA Group, stated that the strategic reorganization of West Air is a concrete action of HNA Group in implementing the strategic requirements of “focusing on the main business and healthy development of aviation”.
In the future, with the strong support of Chongqing Municipal Party Committee, Municipal Government, and Yufu Group, West Air will build a world-class low-cost airline to serve the construction of Chongqing's international aviation hub and contribute to the greater development of the civil aviation industry in Chongqing and even the southwest region in the new era.
Yufu Group was established in August 2016 with a registered capital of 10 billion yuan. The company's sole shareholder is Chongqing Yufu Holding Group Co., Ltd, which is owned by the Chongqing State-owned Assets Supervision Management Committee.
West Air was established in 2007 as a subsidiary of HNA Group. It currently has 31 A320 aircraft and 4 A319 aircraft, employs more than 2,600 people, and has total assets of 12.5 billion yuan. West Air's main base in Chongqing has 160 domestic and international routes covering cities such as Haikou, Guangzhou, Shanghai, Shenzhen, Mandalay, Phuket, Kansai and 54 navigable cities.
This is not the first time HNA's subsidiaries have received local government support.
Earlier in the evening of 11 June 2019, HNA Holdings issued a statement saying that Guangxi Beibu Gulf Investment Group Co., Ltd., Guangxi Airport Management Group Co., Ltd. and HNA Holdings signed the "Framework Agreement on Guangxi Beibu Gulf Airlines Co., Ltd. (GX Airlines) Equity Reorganization and Cooperation", The three parties agreed to restructure GX Airlines through equity transfer, capital increase and share expansion.
In addition, in November 2018, HNA Holding signed a framework agreement with the Urumqi Municipal Government. According to the agreement, the Urumqi Municipal Government or its designated subsidiary will hold 70 per cent equity of Urumqi Air, and HNA's shareholding ratio will be reduced from 70 per cent to 30 per cent.
In December 2018, HNA Group Co., Ltd. and Beijing Capital Tourism Group Co., Ltd. (BTG) signed a framework agreement. HNA Group and BTG will increase support for Beijing Capital Airlines through equity transfer, capital increase and share expansion, and expand the first The BTG Group holds a stake in Capital Airlines and becomes a major shareholder of Capital Airlines.
Some industry analysts believe that the partnership model between Capital Airlines, Urumqi Air and local governments may become a template for other airlines under the HNA Group to seek capital increase and development. In fact, Chen Feng, party secretary and chairman of HNA Group, also confirmed this in an interview: HNA will continue to transfer equities of its local airlines to local governments.
Involving the local governments to reorganize Urumqi Air, Capital Airlines, GX Airlines and West Air strategically are only the initial steps.
/ KUCINTA SETIA
Following Capital Airlines, Urumqi Air and GX Airlines, West Air owned by HNA has received state-owned support.
In the afternoon of 2 December 2019, HNA Group and Chongqing Yufu Asset Management Co., Ltd. (hereinafter referred to as "Yufu Group") signed the "Agreement on Strategic Restructuring of West Air" . Both parties agreed to restructure equity of HNA's West Air.
After the completion of the strategic reorganization, Yufu Group or its designated enterprises have a total shareholding of not less than 70 per cent, thus becoming the largest shareholder of West Air, while the aviation operation of HNA will continue to oversee the production and operation of HNA.
At the signing ceremony, Chen Feng, chairman of HNA Group, stated that the strategic reorganization of West Air is a concrete action of HNA Group in implementing the strategic requirements of “focusing on the main business and healthy development of aviation”.
In the future, with the strong support of Chongqing Municipal Party Committee, Municipal Government, and Yufu Group, West Air will build a world-class low-cost airline to serve the construction of Chongqing's international aviation hub and contribute to the greater development of the civil aviation industry in Chongqing and even the southwest region in the new era.
Yufu Group was established in August 2016 with a registered capital of 10 billion yuan. The company's sole shareholder is Chongqing Yufu Holding Group Co., Ltd, which is owned by the Chongqing State-owned Assets Supervision Management Committee.
West Air was established in 2007 as a subsidiary of HNA Group. It currently has 31 A320 aircraft and 4 A319 aircraft, employs more than 2,600 people, and has total assets of 12.5 billion yuan. West Air's main base in Chongqing has 160 domestic and international routes covering cities such as Haikou, Guangzhou, Shanghai, Shenzhen, Mandalay, Phuket, Kansai and 54 navigable cities.
This is not the first time HNA's subsidiaries have received local government support.
Earlier in the evening of 11 June 2019, HNA Holdings issued a statement saying that Guangxi Beibu Gulf Investment Group Co., Ltd., Guangxi Airport Management Group Co., Ltd. and HNA Holdings signed the "Framework Agreement on Guangxi Beibu Gulf Airlines Co., Ltd. (GX Airlines) Equity Reorganization and Cooperation", The three parties agreed to restructure GX Airlines through equity transfer, capital increase and share expansion.
In addition, in November 2018, HNA Holding signed a framework agreement with the Urumqi Municipal Government. According to the agreement, the Urumqi Municipal Government or its designated subsidiary will hold 70 per cent equity of Urumqi Air, and HNA's shareholding ratio will be reduced from 70 per cent to 30 per cent.
In December 2018, HNA Group Co., Ltd. and Beijing Capital Tourism Group Co., Ltd. (BTG) signed a framework agreement. HNA Group and BTG will increase support for Beijing Capital Airlines through equity transfer, capital increase and share expansion, and expand the first The BTG Group holds a stake in Capital Airlines and becomes a major shareholder of Capital Airlines.
Some industry analysts believe that the partnership model between Capital Airlines, Urumqi Air and local governments may become a template for other airlines under the HNA Group to seek capital increase and development. In fact, Chen Feng, party secretary and chairman of HNA Group, also confirmed this in an interview: HNA will continue to transfer equities of its local airlines to local governments.
Involving the local governments to reorganize Urumqi Air, Capital Airlines, GX Airlines and West Air strategically are only the initial steps.
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