Business / Corporate

HNA in talks to sell over $2 billion Avolon stake to Orix: sources

Bloomberg

HNA Group Co., a Chinese conglomerate unwinding a global acquisition spree, is in advanced talks to sell a minority stake in jet lessor Avolon Holdings Ltd. to Orix Corp., sources said.

Orix has been discussing the purchase of about a 25 percent to 30 percent stake in Avolon from HNA’s Shenzhen-listed arm Bohai Capital Holding Co., according to one of the sources. The sale could fetch more than $2 billion (¥222 billion), the source said, asking not to be identified because the information is private.

No final agreements have been reached, and there’s no certainty the negotiations will lead to a deal, the sources said.

HNA has been discussing a range of options, and other suitors remain interested in Avolon, one of the sources said.

HNA has already shed more than $17 billion of assets this year, a deal-making pace that reverses a multiyear acquisition spree that saddled it with one of corporate China’s biggest debt loads.

That the conglomerate is looking to sell more aviation assets — an area it has defined as core — indicates there is little that HNA considers off-limits in terms of disposals.

A spokesman for HNA declined to comment, while Orix didn’t immediately reply to an email seeking comment.

It was reported last week that HNA has been exploring options for Dublin-based Avolon, which is the world’s third-biggest plane lessor. Firms backed by Hong Kong tycoons Li Ka-shing and Henry Cheng are among suitors that have held talks about buying a stake or some of Avolon’s aircraft, people with knowledge of the matter said at the time.