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Bloomberg
HNA Group Co.’s minority stake in airline Virgin Australia Holdings Ltd. is drawing interest from potential bidders as the Chinese conglomerate offloads non-core assets to reduce debt, according to people familiar with the matter.
The approximately 20 percent stake could attract bids from existing shareholders in the company as well as other airlines and investment funds if HNA decides to pursue a sale, the people said, asking not to be identified because the deliberations are private. While the group is open to offers, it isn’t actively working on selling its holding.
Singapore Airlines Ltd. and Nanshan Capital, which each control about a fifth of Virgin Australia’s shares, are among the companies weighing a bid, the people said. The Australian airline has a market value of about $1.4 billion after its shares dropped about 20 percent this year through Thursday. Singapore Airlines is majority owned by sovereign fund Temasek Holdings Pte.
More than 90 percent of Virgin Australia’s shares are controlled by five investors, according to the company’s last annual report. In addition to HNA, Singapore Airlines and Nanshan, they include Corvina Holdings.
A representative for HNA didn’t immediately have a comment. Representatives for Virgin Australia and Singapore Airlines declined to comment on speculation. Nanshan didn’t immediately respond to calls and email.
HNA is selling off assets after racking up one of China’s biggest corporate debt loads in a global acquisition spree. It sold out of the Hilton Worldwide Holdings and its stake in NH Hotel Group. The Chinese company also agreed to sell the Radisson hotel chain, as well as a stake in aircraft leasing firm Avolon Holdings.