(Yicai Global) Aug. 21 -- The aircraft leasing company under China's HNA Group faces uncertainty in repaying CNY500 million (USD72.3 million) in ultra-short-term debt due to the Covid-19 pandemic, it said in a statement this week.

Bohai Leasing issued the CNY500 million bond on Dec. 10 with the payment date set for Sept. 8 this year at 3.98 percent interest. The firm intended to use the funds to repay its interest-bearing debt which is to mature then.

The bond's lead underwriter, China Merchants Bank, also announced a bondholder meeting on Aug. 26 to discuss matters related to the issue.

Industry insiders expressed concern about whether Bohai Leasing can complete the redemption of the bonds as they mature. "Bohai Leasing's actual controller has relatively weak financing capabilities. Bohai Leasing has many international aviation businesses. It is facing more uncertainties and challenges [with the bond redemption] as the global pandemic persists," a sector analyst told Yicai Global.

The bond may not be redeemed at maturity, another senior leasing company staff also predicted to Yicai Global.

Bohai Leasing conducted a number of overseas asset acquisitions from 2012 to 2018, including major Irish aircraft leasing company Avolon Holdings and its C2Aviation Capital unit and big UK-based container leasing company Seaco and Bermuda's Cronos. These assets have not yet become profitable, the source said.

Affected by the global pestilence, Bohai Leasing's performance has greatly worsened in the first half. It projected a net loss of between CNY1.8 billion and CNY2.7 billion in the period, its forecast released last month shows.

The company's business has been declining over the past three years even without the coronavirus. Its net profit gradually fell from CNY2.63 billion in 2017 to CNY2.279 billion in 2018 and CNY1.848 billion last year, with a considerable part of last year's net profits stemming from asset sales, Yicai Global learned from the firm's financial data.

The company's bond payable balance was about CNY116.4 billion as of March 31, up CNY11.7 billion from the start of the year, per its disclosed data.

Urumqi-based Bohai Leasing is currently the world's third-largest aircraft leaser and second-biggest container lessor, with more than 30 operation centers around the world and a business spanning six continents.

Editors: Tang Shihua, Ben Armour