HNA-Caissa to raise $1.2bn share sale

Bloomberg

HNA-Caissa Travel Group Co. plans to raise as much as 8 billion yuan ($1.2 billion) through a private share sale as the Chinese tourism and catering company seeks funds to expand its cruise and global-travel services.
The company’s controlling shareholder HNA Tourism Group and as many as nine other investors will buy the shares, HNA-Caissa said in a statement dated Monday.
The funds will be used for four projects including a cruise ship sales platform and international travel package services.
A share sale raising the maximum 8 billion yuan would be equivalent to 40 percent of HNA-Caissa’s current market value of 20 billion yuan and roughly double its combined revenue in the past two years, according to the compiled data.
Shares of the company on the Shenzhen exchange dropped by the daily limit of 10 percent Monday after trading resumed following a six-month suspension.
“The company may fall another 20 percent to 30 percent from current levels to be in line with its peer valuation as the broader market has fallen a lot since HNA-Caissa Travel was suspended in November,” Zhou Yuhua, analyst at Sealand Securities in Shenzhen, said by phone.
“Meanwhile, there is a dilution effect on the share price as the size of the placement is very big.”
The stock had been halted since November 9 pending a “major asset reorganisation plan,” according to a recent
company statement at the time. HNA-Caissa dropped to 24.71 yuan as of 1:09 p.m. in Shenzhen trading on Monday.
The Shenzhen Stock Exchange Composite Index declined 3.3 percent, extending its losses to 17 percent over the past six months while HNA-Caissa was suspended.
HNA-Caissa also said Monday in a separate statement that a plan to acquire Beijing Capital Airlines and its controlling shareholder fell through after it failed to gain the needed regulatory approvals on time.
A person answering the phone at HNA-Caissa’s investor relations office said the company had no additional comments.
HNA Group is a Chinese conglomerate headquartered in Haikou, China. Founded in 2000, it is involved in the aviation, real estate, financial services, tourism, logistics, and other industries. It is part owner of Hainan Airlines, China’s fourth largest airline.
In 1993, Chen Feng established Hainan Airlines. Following a restructuring of the airline in 1997, Feng founded HNA Group, Co., Ltd. as the parent company of Hainan Airlines in January 2000. Following the CAAC’s creation of three major airline groups in 2000, HNA Group took control of China Xinhua Airlines, Chang An Airlines, and Shanxi Airlines to remain competitive.
Since then, the group has undergone great diversification, entering multiple industries such as tourism and logistics. It has also significantly expanded its involvement with both national and international companies.
These include several airlines, NH Hotel Group, Uber, and an office tower and a hotel in New York City. HNA Group has spent more than US$3 billion on foreign acquisitions.