BEIJING (Reuters) - China’s HNA Group has paid a more than 3 billion yuan ($474.5 million) jet fuel bill, ending months of contentious discussions between the embattled conglomerate and a state-run aviation fuel firm, two people with knowledge of the matter said on Thursday.
Facing a cash crunch following $50 billion in acquisitions, the aviation-to-financial services group settled the bill last week with a cash transfer to China National Aviation Fuel Group Ltd (CNAF), said one of the sources.
In an email to Reuters, an HNA Group spokesman said: “Hainan Airlines Holdings Co. Ltd has always cherished its sound cooperative relationship with China National Aviation Fuel Group Limited and all business is being carried out as usual.”
A CNAF spokesman said he could not confirm the arrangements.
HNA’s outstanding balance with CNAF, China’s near-monopoly marketer and distributor of aviation fuel, had swelled significantly over the previous six months, Reuters reported last month.
In recent weeks, HNA had offered various solutions to settle the jet fuel bill, including the transfer of stakes in joint venture firms and real estate assets, said two sources with knowledge of the discussions.
“The bill was sorted out after CNAF’s communications with the senior management of HNA Group,” one of the sources said.
The fuel supplier normally gives customers one month credit period and the over 3 billion yuan bill was the backlog that went beyond due dates, the person added.
The best solution for CNAF was cash, the person said, since the transfer of stakes HNA offered would take much longer to materialize.
HNA has offloaded more than $6 billion in prime real estate in Australia, New York and Hong Kong, while selling shares in Deutsche Bank, Park Hotels & Resorts, and Hilton Grand Vacations Inc.
In Hainan, HNA also is searching for “strategic partners” for its wide portfolio of investments, including in its 100 billion yuan Haikou central business district development.
Earlier this month, HNA Infrastructure Investment Group said it would sell a Hainan-based property company and logistics unit to Sunac China, a real estate developer, for 1.9 billion yuan.
Reporting by Chen Aizhu and Matthew Miller; Editing by Stephen Coates and Muralikumar Anantharaman