China's HNA may sell stake in Hilton Grand Vacations

Chinese conglomerate HNA, a 25% shareholder in Hilton Grand Vacations, is said to be in talks to sell some, if not all, of its estimated $1.2 billion US dollars' worth of HGV shares, reports The Wall Street Journal.

A HNA Group logo as seen on the HNA Plaza in Beijing, February 9, 2018 [File Photo: VCG]

As HNA is committed to a lockup agreement, which involves holding its HGV shares for at least two years. That deal is scheduled to expire in March, 2019. As such, the company will have to obtain approvals from directors of Hilton Grand Vacations before transferring or selling any part of its shares.

However, if HNA gets approval, it could be in line for a profit of around $570 million US dollars from the sale.

HNA has been looking for ways to pay down its debt, while at the same time, generating capital for new acquisitions, as well as adhering to China's guidelines on acceptable overseas investments, reports The Wall Street Journal.

HNA has reportedly been undergoing a large-scale restructuring of its assets, both domestically and globally.

The company is reported to have sold billions of dollars' worth of real estate properties over the past few weeks.

Since late 2016, China has been reinforcing inspections of authenticity and regulation compliance of outbound investments in a bid to improve returns and control risks.

Earlier last month, Chinese authorities updated their "sensitive sectors" for outbound investment, restricting outbound investment in properties, hotels, cinemas, entertainment, sports clubs, and equity investment funds, according to a statement of the National Development and Reform Commission (NDRC).

The country's non-financial outbound direct investment dropped 29.4 percent to 120 billion US dollars in 2017.