The accidental death in France of Wang Jian, chairman, and co-founder of HNA Group, greatly complicates ongoing deleveraging and restructuring moves intended to slash the mountain of debt endangering the organization, which is one of the world's biggest companies.
Wang was the architect of a series of spectacular multi-million dollar acquisitions that transformed a nondescript regional airline in Hainan into a Fortune 500 company with $230 billion in assets in the space of just 25 years. HNA Group, which began life as Hainan Airlines, now has major international investments in aviation, tourism, and finance.
It has holdings in Deutsche Bank, Hilton Worldwide, Virgin Airlines and Hong Kong Airlines, among others, and skyscrapers in London. Its international workforce comes to more than 400,000 people
That growth, however, was funded by massive debt, and Beijing's current crackdown to force heavily indebted firms like HNA to deleverage is pummeling HNA's bottom line, and forcing it to divest a number of its prized acquisition such as Hilton Worldwide.
Beijing's crackdown is intended to minimize mounting risks to the financial system, which is under strain from a rising mountain of corporate debt. It's also hammering firms like HNA engaged travel, leisure, and entertainment.
HNA is now in the midst of the extremely complicated process of paring down or deleveraging some of its international assets to reduce its enormous domestic debt load (estimated to be in the billions of dollars) it took on during its rapid expansion in recent years. HNA insiders said Wang is the only person who can make sense of the maze of international transactions he created to grow the group. The group's restructuring is now imperiled.
Wang's death had an immediate negative effect on the group's fortunes. CWT, a Singaporean commodities, and logistics group acquired by HNA last year plummeted to 7.4 percent in Hong Kong yesterday before closing down 5.6 percent. Other HNA firms traded in Hong Kong fell as much as 2.2 percent.
Three HNA subsidiaries listed on the Shanghai and Shenzhen stock exchanges lost between one percent and 4.3 percent yesterday. Both bourses, however, suspended trading on most of HNA's listed subsidiaries late last year amid the company's restructuring.
Wang and co-chairman Chen Feng, who founded Hainan Airways with Wang, each hold 15 percent in HNA and are group's biggest individual shareholders. The company is also 30 percent owned by a New York-based foundation and 23 percent controlled by a China-based charity. HNA's individual shareholders, including Wang, promised to give their stakes to the New York charity fund in case of leaving the company or death.
Wang, 57, died Tuesday after accidentally falling off a wall at the village of Bonnieux in the Vaucluse area of Provence, an area popular with tourists. Sources said Wang fell some 15 meters from a wall near a scenic church while taking pictures.
Local police said Wang's fall was likely an accident. "He stood on the edge of a sharp drop to get his family to take a picture of him and fell," said local police chief Hubert Meriaux.
Wang went into a coma after striking his head on rocks and was immediately taken to a hospital. He did not recover.
HNA Group announced Wang's death on its website.
"HNA Group extends deepest condolences to Mr. Wang's family and many friends. Together, we mourn the loss of an exceptionally gifted leader and role model, whose vision and values will continue to be a beacon for all who had the good fortune to know him, as well as for the many others whose lives he touched through his work and philanthropy," said HNA's board and management team in a statement.
