(Yicai Global) Sept. 17 -- Plans by Chinese conglomerate HNA Group to acquire a major e-commerce firm in the country have run into difficulty amid question marks over the target's valuation, sources close to the deal indicate.

The debt-laden firm announced plans in April to acquire the parent company of Dangdang.com through its HNA Technology unit for CNY7.5 billion (USD1.1 billion). However, the process has faced multiple delays and may not go through, domestic tech news outlet 36Kr reported company insiders as saying.

The Hainan-based company had planned to use a new share issuance and CNY3.4 billion in cash to fund the acquisition of Dangdang, which started life as an online bookstore in 1999. The target company delisted from the New York stock market in 2016 with a valuation of USD536 million and it is the wide discrepancy between this figure and the touted takeover valuation that has led to heated debate on the move and even drawn the eyes of regulators.

HNA Technology has delayed responses to the Shanghai Stock Exchange 12 times when questioned over the deal's value. Most recently on Sept. 13, the company cited its major asset reorganization which dates back to January as a reason for the lack of response, adding that "external factors have changed."

The proposed deal comes at a time when HNA has already embarked on a series of sell-offs due to heavy debt. The group's troubles started in June last year when Chinese regulators adjusted risk assessment processes for private firms that were fueling expansion through debt, thereby choking off access to capital. The group, which owns China's biggest non-state carrier Hainan Airlines, has since embarked on a series of sell-offs in real estate and of corporate shareholdings. It has raised CNY21.5 billion from selling property projects this year, while also divesting stakes worth CNY9.8 billion in companies such as Hilton Grand Vacations and Deutsche Bank.

Questions also remain on the ability of HNA Technology to raise the funds needed for the Dangdang acquisition. Six months on from the announcement of the proposed transaction, financing is still not in place. The deal is pending, Dangdang's Vice-President for Marketing Kan Min told 36Kr in response to concerns over the deal, adding that a conclusion is expected within one to two weeks.

Kan also denied reports that Dangdang could accept a lower deal valuation from HNA, stating that "the acquisition is either done at the agreed price or will be canceled."

Many funds and capital firms have also been in touch with the firm and there are possible investments on the table for Dangdang, he said.

Editor: William Clegg