(Yicai Global) Dec. 8 -- Chinese chemicals and steel manufacturer Fangda Group Industrial has started managing the troubled HNA Group's aviation business involving several brands such as Lucky Air and China Xinhua Airlines.

The rights of operating Hainan Airlines Holding which includes the brands of Hainan Airlines, Air Changan, Shanxi Airlines, Fuzhou Airlines, Urumqi Air, and GX Airlines were transferred today, the Haikou-based former parent said in a statement on WeChat.

The Shanghai-listed target company has enlarged with new shares added yesterday. Hainan Airlines' market cap widened to CNY65.5 billion (USD10.3 billion) as of yesterday, replacing Spring Airlines as China's fourth-biggest airline group. The Hainan province-based firm said on Nov. 29 that it will issue 16.4 billion shares to double its total to improve its financial situation.

Fangda's acquisition is one in a series of moves of HNA's restructuring. The financial and aviation conglomerate declared itself bankrupt on Jan. 29, following years of aggressive expansion overseas.

Last September, Beijing-based Fangda offered the highest price for a controlling stake in Hainan Airlines at CNY38 billion (USD6 billion). Moreover, it promised to provide an additional CNY3 billion (USD472.2 million) to supplement the airline's capital. The remainder of shares would be held by a trust, the beneficiaries of which would be the aviation company's creditors.

After the transfer, HNA's working team is expected to continue to advance the conglomerate's bankruptcy reorganization plan while carrying out the disposal of related risks, including setting up a trust structure.

But a key person in the team has moved on. Gu Gang, the former Communist Party of China committee secretary at HNA who used to be leading its restructuring team, has started working for Hainan province's Development and Reform Commission, according to the commission's website.

During the second creditors meeting, Gu said that Hainan Airlines will receive about CNY25 billion from Fangda's planned CNY38 billion to increase its cash flow, and almost 40 percent of that should be available to be used for operations after repaying overdue debts.

Shares of Hainan Airlines [SHA: 600221] slid 0.5 percent to CNY1.96 (30 US cents) in the afternoon. The shares are still more than 30 percent up this year.

Editors: Liao Shumin, Emmi Laine, Xiao Yi