A classic example is the private placement of Hainan Airlines.

HNA has changed its bones-an exclusive investigation into the formation of "Greater China"

The "Greater China" group that HNA Group is operating has experienced twists and turns, and the listing plan has been pushed back and forth. What is the story that is not known to outsiders? Will Soros invest heavily again? Will the largest shareholder of Hainan Airlines Group change hands soon? Why did the Hainan provincial government take out 1.5 billion at a critical moment? After the listing of Daxinhua Group, will the bosses of HNA Group, represented by Chen Feng, stage the myth of getting rich overnight? The reporters of "New Finance" went to Hainan and got a lot of first-hand information through in-depth exchanges with Chen Feng, Wang Jian, Chen Wenli, Li Xianhua and other HNA executives. "The' ‘HNA (Hainan Airlines)' sign above our building is a little dirty. Should it be cleaned?" Not long ago, the cleaners of HNA Development Building directly submitted their opinions to the leaders of the group's board of directors through the unique network office system of HNA Group. "No, our brand will be changed soon." The decision makers of HNA answered. Text/Lu Jian Luo Wei As we all know, HNA people are implementing a great strategic plan-preparing for the establishment of "Daxinhua" Group. However, what is the relationship between this "Greater China" and Xinhua Aviation Holdings Limited, which is now in private placement? What's the relationship with Hainan Airlines Limited? What's the relationship with HNA Group? What role will "Daxinhua" play in the future? These problems are within HNA, and many people can't say clearly. "HNA is now in the preparation period of being reborn again." In an interview with New Finance, Chen Feng, chairman of HNA Group, said, "In the next five to seven years, HNA has two goals: one is to create a world-class air transport brand for the Chinese nation, and the other is to create a world-class enterprise for the Chinese nation. There are three signs, one is the size of the fleet; The second is the degree of passenger recognition; The third is the international popularity of HNA brand. At present, we are establishing China Xinhua Airlines Group, which is a major private placement in the aviation industry in China, laying the foundation for our future development. " Chen Feng's "China Xinhua Aviation Group" is exactly the concept of "Greater China" in the industry. At present, because the capital injection plan has not been completed, and the requirement of the Company Law for a group to control at least five subsidiaries has not been met, the group can not be listed, so it can only absorb funds through "Xinhua Holdings". In this regard, HNA has been planning for a long time. Hainan Airlines has developed from a local air transport enterprise to today's scale-as of June 2115, it has 117 aircraft, the total assets of the group are more than 43 billion yuan, and there are more than 19,111 employees-which is inseparable from their successful capital operation. As the HNA Development Strategy Research Group of the State Council Development Research Center said: The decade of rapid development of HNA is also a decade of successful capital operation. Through a series of capital operations, HNA has gained speed, but it has brought the problem of high debt. Moreover, due to capital constraints, the status of the fourth child in HNA industry is difficult to move forward for a while. It is an open secret that HNA needs financial support and a large number of them. Every financing has brought about a decline in HNA's asset-liability ratio, and then it has returned to the warning line without exception. HNA spared no effort to raise funds. "Great Xinhua" is precisely the strategy that HNA people skillfully combine development goals with solving financial problems. Chen Feng made it clear at the news briefing of Soros Fund's investment in Xinhua Holdings on 15.11 that the establishment of Xinhua Airlines Group is divided into three stages: the first stage is the preparatory period of private placement, with a total private placement of about 3 billion yuan, of which Soros's investment accounts for about 11%. By the end of this year, according to the specific situation of private placement, about 5 billion yuan will be raised and the founding meeting will be held, which is the second stage; In the third stage, Grand China Aviation Group plans to list on H shares in Hong Kong. Before 2113, HNA had been qualified for refinancing, but it was not enough to ease the capital bottleneck and simply meet the "three consecutive years of profitability". Under the depressed market environment and special management system in China, the direct financing of HNA must be approved by the competent authorities. "We report materials every year, but we queue up every year." Among the top executives of HNA, the executives directly responsible for capital operation said helplessly. According to him, due to the overall downturn in China's capital market in 2111 and 2112, the CSRC has controlled the pace of refinancing of listing, and both initial public offerings and additional issuance are strictly restricted and queued for solution. Hainan Airlines ranks outside 151 almost every year. In 2112, the ranking was just a little higher, about 131. As a result, SARS came in 2113. "In all industries in China, the air transport industry is the most affected by SARS. During the SARS period, I went to Guangzhou to have a look. At that time, there were more than 21 planes lined up on the tarmac at Baiyun Airport, including five or six 777s. Looking from here to there, more than 21 planes lined up neatly. The scene was really spectacular, but I felt very sad. At that time, the civil aviation industry was really miserable. " The executive said. Hainan Airlines said in its 2113 annual report that due to the SARS epidemic and other reasons, the company realized a total profit of-1.474 billion yuan in 2113, a decrease of 1.145.39% over the previous year. Among them, the profit from main business decreased by 1.15 billion yuan to 45 million yuan, down by 96.23%; The gross profit rate decreased from 23.78% in the previous year to 8.43%, a decrease of 1.5%, resulting in a net profit of-1.269 billion yuan, a decrease of 1.332% over the previous year; Earnings per share -1.74 yuan, net assets per share-1.53 yuan, adjusted net assets per share-1.81 yuan, return on net assets -113.71%, net cash flow from operating activities-645 million yuan, net cash flow from operating activities -1.88 yuan per share. "The huge losses in 2113 meant that our three-year business performance was gone, and we lost the qualification for refinancing. At that time, we felt very wronged. "SARS" was entirely caused by external causes beyond human control, not by problems in our enterprise's core competence or business development strategy, nor by mistakes in enterprise's decision-making. Our enterprise was fine, but due to irresistible reasons, it could not maintain its profitability for three consecutive years, and HNA Co., Ltd. could not raise funds for the next three years. Moreover, it will take at least five years to queue up after three years. Do you think this is reasonable? " An executive of HNA said so. "Such a system means artificial restrictions, which has led many national enterprises in China to lose the qualification of direct financing and the opportunity to use the capital market to promote development in the next five years. This is unfair." The senior leader of HNA has been unable to let go. At that time, Hainan Airlines, which was extremely eager for funds, had been trying to state its reasons to the CSRC in the hope of restoring its qualification for direct financing. However, the CSRC said that this is stipulated in the Company Law and it is necessary to find the National People's Congress. HNA immediately went to the Law Committee of the National People's Congress, and the Law Committee expressed sympathy for HNA, thinking that this phenomenon was abnormal. However, according to the laws of China, only the National People's Congress Standing Committee (NPCSC) has the right to solve this problem. "At that time, we thought that the National People's Congress could solve this problem for us. We at least appealed to more than 111 listed companies in the three industries of tourism, aviation and hotel catering that suffered losses due to SARS. If this matter breaks the ice, it means that more than 111 related companies have qualified for financing. We did it with this idea. However, since the second half of SARS in 2113, our work has not progressed. " Talking about the past, a direct participant of HNA still looks helpless. What we lose in hake we shall have in herring. Although the plan to break through the policy restrictions was unsuccessful, HNA's private placement made an unexpected breakthrough. Time difference of private placement In the current capital market, the reform of non-tradable shares is in full swing. Many capital predators realize that if they hold non-circulating legal person shares of listed companies, they can obtain the qualification of listing and circulation as long as they make a reasonable "consideration" plan. At that time, whether it is holding or ship pulled, the initiative will be in our own hands. What's more, the top regulators in China's capital market have also said that enterprises that have successfully reformed the share-trading system will give priority to financing and holding shares by top managers. For a time, non-tradable shares became a hot potato. The trading of legal person shares is very active, and the price is rising. It is in this sensitive period that the relevant state departments approved Hainan Airlines Co., Ltd. to issue additional legal person shares. A stone stirred up a thousand waves, and many companies tried to follow suit, but no one ever succeeded. Hainan Airlines Co., Ltd. became the only listed company that obtained the qualification of private placement this year. The initial plan for HNA's private placement is 2.8 billion yuan, which is far greater than the hundreds of millions of funds obtained in the A-share market. How do HNA people do this? Nature is full of stories. But no one has given an answer, which may be a mystery that the market can never solve. For all kinds of rumors in the workshop, senior managers of HNA are noncommittal. They just emphasize the following two aspects. First, the private placement of HNA shares was successful because the approval of CSRC was before the management of China decided to solve the share-trading problem. "If it is after this, there may be variables in this matter." A person in charge of HNA Group told the truth. Secondly, this decision shows that the Party and the government support the development of advanced productive forces and enterprises. Innovation ability and reform consciousness are very strong. HNA people who have benefited are not stingy with praise for decision makers. Will HNA shares after the additional issuance be realized through the capital market, thus obtaining a premium? In this regard, the senior management of HNA said that even if Xinhua Holdings becomes the largest shareholder of HNA, even if it obtains the right to circulate, it does not mean that the legal person shares of HNA Group have plans to sell. What is the relationship between the private placement of HNA shares and the "Greater China" that HNA Group is operating? "This is two aspects of the same thing." A senior HNA official told New Finance that the Daxinhua Aviation Group currently under construction is an upgraded version of Xinhua Aviation Holding Co., Ltd. approved by the Civil Aviation Administration of China on October 5, 2114. (Civil Aviation Political and Legal Letter [2114] No.5 Document "Reply on the Establishment of China Xinhua Airlines Group Co., Ltd."). At present, the helmsman of Hainan Airlines uses the name of Xinhua Airlines Holdings Co., Ltd. to conduct private placement activities. At the end of this year, part of this fund will be directly injected into Hainan Airlines Co., Ltd. as part of the private placement. The other part of the funds will be used to acquire other airlines of Hainan Airlines Group, including China Xinhua Airlines Co., Ltd., Changan Airlines Co., Ltd. and Shanxi Airlines, and form the world-renowned "Greater Xinhua Group". As we know, these four airlines have been merged as early as 2112, and the effect is very good. According to HNA's plan, after the capital operation is completed, the core assets and brand concept of HNA Group's main air transport business will be replaced by "Daxinhua". The image of a new aviation group that has got rid of the regional concept will emerge, which is the real connotation of Chen Feng's "reinvention". Regarding the details of the formation of "Greater China", a senior leader of HNA explained that HNA's three-year continuous profit performance is gone, and the road of direct refinancing in the capital market is impassable. However, many investment funds intend to invest in HNA. "Just because we are listed companies, we cannot absorb these funds; If you are not a listed company, you can invest money at any time. This is an obvious paradox. " At that time, the relevant departments of the CSRC told HNA that our restrictions were mainly aimed at public offering of shares, because public offering of shares must protect the interests of the majority of small and medium-sized investors. However, private placement is willing to fight and suffer. As a strategic investor, he will make a careful evaluation of this project before making a decision. The attitude of the supervisor made HNA people see the turning point of things. After hard work, the relevant state departments finally agreed to HNA's private placement of non-circulating legal person shares. Why did you only approve one? A senior manager of HNA believes that this is actually an experiment made by relevant state departments for the innovation of China's capital market. "But I didn't expect that after HNA just got the approval, the relevant departments decided to solve the biggest problem that troubled the China stock market first, instead of just considering whether these more than 111 enterprises that suffered losses due to SARS had to refinance. Only when the problem of non-tradable shares is solved can the country develop. Therefore, when the two benefits are compared, they take the big profit. " Whether HNA's explanation is logical or not is a matter of opinion. However, HNA's qualification for private placement has given HNA a bigger idea. HNA Co., Ltd. is a single listed airline at present, and HNA policy makers intend to integrate HNA Co., Ltd. with other airlines (Xinhua, Shanxi and Chang 'an) to form a large platform with resources that can be shared and operated in a unified way. According to Li Xianhua, executive director of HNA, according to the current regulations of the Civil Aviation Administration of China, each airline has its own route management rights, and it is impossible to "fly in tandem" with each other. To make changes, it is necessary to sign an agreement to rent which company's aircraft can fly which route, and resources cannot be shared. For example, in summer, Hainan is off-season, Xinjiang and Xi 'an in the north are very hot, and HNA's capacity cannot be deployed to the north to fly. Winter is the tourist season in Hainan, and the snowy north is the off-season, but the plane can't be transferred. HNA has acquired three airlines, but they are still independent enterprises, thus losing the significance of acquisition. "The significance of the acquisition is to combine these four airlines to form a new platform, which can enjoy resources and achieve benefits of 1+3 > 4". In Li Xianhua's view, the future "Greater China" is to organize these four airlines into a market-oriented platform with capital as the link. Behind more than 3 billion yuan of funds According to the survey of New Finance, so far, Xinhua Holdings has raised about 3 billion yuan, including the following aspects: (1) Hainan Development Holdings Co., Ltd. invested 1.5 billion yuan; (2) HNA Group and its affiliated enterprises contributed 1.15 billion yuan; (3) Soros contributed 25 million dollars; (4) The institutional investors at home and abroad who are under negotiation have basically realized about 1 billion yuan, and the intended funds are not less than several billion yuan. Behind every sum of money, there is a story. In the information provided by HNA Group, there is the following statement: "After the decision of the Hainan Provincial Party Committee and the provincial government and the vote of the Hainan Provincial Investment Management Committee, Hainan Development Holdings Co., Ltd. invested 1.5 billion yuan in Xinhua Holdings, and the current capital of 1.5 billion yuan has been put in place." According to "New Finance", there are many stories behind these short dozens of words. As one of the largest enterprises in Hainan Province, the provincial party committee and government naturally spare no effort to support HNA. However, with the advancement of marketization and the reform of China's financial system and state-owned enterprises, the government's intervention in local enterprises is becoming more and more cautious. In this regard, Li Xianhua explained: At first, we did not consider the provincial government's investment. At that time, many large domestic enterprises expressed strong interest.