HNA Group, the heavily indebted aviation-to-financials conglomerate, plans to sell some or all of its $US6.3 billion stake in Hilton Worldwide Holdings, underlining its need to shed assets and tackle a cash crunch.
The sale, announced through a regulatory filing with the U.S. Securities and Exchange Commission, comes about a year and a half after HNA bought a 25 percent stake in Hilton for around $US6.5 billion to become its biggest shareholder.
Today, HNA owns 26.1 percent of Hilton.
Following a $US50 billion investment spree in the past two years, HNA has sold assets such as land and office buildings in recent months to pay down a large pile of debt that is straining its finances.
In just the first 11 months of last year, HNA's bank loans and bonds surged by more than one-third to 637.5 billion yuan ($US101.1 billion), a HNAChina bond market filing showed.
HNA had taken out a loan for its Hilton shares as well. A December 2017 SEC filing showed HNA had increased a loan against its Hilton shares to $US3.5 billion from $US3 billion. The lenders are JPMorgan Chase & Co, Credit Suisse AG, Deutsche Bank AG and UBS AG.
No details were available on when or to whom HNA would sell its Hilton stake, or the size of the divestment. A Hilton spokesman declined to comment.
An October 2016 SEC filing showed there are restrictions on how HNA can sell its Hilton stake if a divestiture happens in the first two years of ownership. Limitations included obtaining the approval of a majority of Hilton's board.
Hilton's shares were up 1 percent at $US78.79 in late morning trade.
HNA sold its 25 percent stakes in Park Hotels & Resorts and Hilton Grand Vacations Inc in March. Both stakes were worth a total of $US2.5 billion and were sold in the open market.
(Reporting by Ankit Ajmera in BENGALURU and Koh Gui Qing in NEW YORK; Editing by Bernard Orr and Dan Grebler)