China's HNA says could benefit from curbs on foreign deals

WASHINGTON (Reuters) - China’s efforts to shore up its currency by placing restrictions on foreign acquisitions could benefit aviation and shipping giant HNA Group Co Ltd by reducing competition for deals from other Chinese bidders, one of its top executives said.

People board a plane of HNA Group in Qingdao, Shandong province, China, October 17, 2016. REUTERS/Stringer

Guang Yang, chief investment officer of HNA Capital - a unit of the fast-growing HNA Group that has been one of China’s most acquisitive overseas dealmakers - also said on Tuesday he hoped that the Chinese currency curbs would be temporary.

China has tightened control of capital leaving its borders in the past week to stabilize the yuan CNY=CFXS, which hit a low in November not seen in more than eight years. Cash transfers abroad of more than $5 million for portfolio or direct investment are drawing more scrutiny from the government, sources have told Reuters.

“That will limit some other not so qualified - in our view - buyers,” Guang told a breakfast policy meeting of the Cohen Group in Washington, D.C. “That will put us in a position to do acquisitions with less competition.”

Guang added he was optimistic China’s new capital controls are interim measures aimed at steadying its currency, given that they contradict the country’s long-term plan of encouraging Chinese firms to invest abroad, as outlined under the “One Belt, One Road” blueprint.

Best known for its flagship carrier Hainan Airlines Co 600221.SS, HNA has more than $100 billion in assets and is a poster child of corporate China's overseas buying spree. It has announced about $20 billion of deals just this year alone, Reuters calculations showed.

Guang said HNA would also be interested in investing in U.S. infrastructure, which has been championed by U.S. President-elect Donald Trump, who wants to spend $1 trillion on the sector over ten years. Guang added that he hoped Trump would welcome foreign investment in the United States based on his emphasis on creating jobs.

Among HNA's overseas deals this year was a $6.5 billion purchase of a 25 percent stake in hotel chain Hilton Worldwide Holdings Inc HLT.N.

HNA's Avolon Holdings also agreed to buy CIT Group CIT.N aircraft leasing assets worth $10 billion in October, a deal that will create the world's third-largest lessor.

Headquartered in the Chinese resort island of Hainan, the firm bought Swiss airline catering firm Gategroup Holdings GATE.S for $1.5 billion in April, and purchased electronics distributor Ingram Micro Inc IM.N for about $6 billion this week.

Reporting by Koh Gui Qing in Washington, D.C.,; additional reporting by Greg Roumeliotis in Washington, D.C.; Editing by Andrew Hay