(Yicai Global) Nov. 1 -- HNA Group’s restructuring plan was given the official green light by the Higher People’s Court of Hainan province yesterday, the heavily indebted Chinese conglomerate said in a statement. 

The restructuring will include capital injection by strategic investors and the transfer of equities, assets and management rights, an insider familiar with the plan told Yicai Global. Haikou-based HNA has debts of CNY1.1 trillion (USD171.8 billion) and assets of just over CNY500 billion (USD78.1 billion), Yicai Global also learned. 

The group’s three listed companies account for a large share of its liabilities. Hainan Airlines Holding, its air transport company, has debt of about CNY161.3 billion; HNA Infrastructure Investment Group, its airport-related business, has debt of CNY95.2 billion; and merchandise wholesaler and retailer Ccoop Group owes CNY33.2 billion. 

Hainan Airlines and HNA Infrastructure have received funds from strategic investors that will be given controlling stakes in these companies after the reorganization. But Ccoop has not received the requisite funding, so its assets will be sold to go toward paying off its debt. 

Compared with the listed companies, HNA’s 321 other units have debts totaling CNY746.7 billion, but the value of their assets is just CNY253.2 billion. The assets of these firms will be transferred to six equity-holding platform firms which will be owned by a new firm established by HNA Group, according to the restructuring plan. 

This new company will include the six platform firms in a trust plan, and the creditors’ future repayment will depend on the outcome of the trust plan’s operating revenues and disposal of assets. 

This new firm will set up a board of trustees, under which there will also be a managing agency to make decisions on the direction of future development, the insider told Yicai Global. The reorganization is expected to be completed by next March at the earliest. 

HNA’s three listed companies had mixed fortunes during trading today. Ccoop [SHE:000564] climbed by 3.5 percent to CNY4.09 (64 US cents), while HNA Infrastructure [SHA:600515] fell 1.2 percent to CNY8.9 (USD1.40), and Hainan Airlines [SHA:600221] dropped almost 1 percent to CNY2.07 (32 US cents). 

Editors: Tang Shihua, Tom Litting