Chinese media report that a 51% subsidiary of China National Aviation Fuel Group Corp, Guangzhou-based South China Bluesky Aviation Oil Co. has threatened to cease supplying fuel to the airline subsidiaries of cash-strapped HNA Group if the company doesn't pay off five months of overdue fuel bills by the end of this week.

In a statement, the fuel company also sought a written guarantee that HNA would no longer delay payments, or find another supplier.
"We have actively contacted HNA Group for payment via phone calls, on-site visits, collection letters and lawyer's letters, and we also filed a case to the China International Economic and Trade
Arbitration Commission, but so far we still have not received the defaulted payments," the SCBAO statement continued.
Mounting debts
The aviation-to-financial services group chaired by billionaire tycoon Chen Feng, has controlling stakes in 13 carriers in Greater China including Hainan Airlines, China Xinhua Airlines and
Fuzhou Airlines.
The group's half-year financial statement showed that its fuel payments in the first half of 2017 totaled 324 million yuan (US$51 million). However, a Reuters report on March 1 said that HNA
Group owed around CNY3 billion (US$476 million) to China National Aviation Fuel Group Corp.

Hilton for sale
Press reports said that SCBAO's payment demand was just the latest incident in a series of events since HNA encountered a recent capital crunch. In the past few months, the group has been selling
overseas assets to cut debts and improve liquidity.
Just last week, CargoForwarder Global reported that the HNA Group planned to sell its US$1.4 billion assets in the Hilton Worldwide Holdings hotel chain Park Hotels & Resorts Inc.
Moody’s lowers thumb
In a related development, Moody’s Investors Service on Wednesday downgraded the outlook on all the ratings of HNA-owned Swissport Group and its units from stable to negative, citing concerns
about the airport cargo handler’s potential failure to collect loan repayment from an HNA affiliate and cash flow problems. The outlook affects the ratings of Swissport Investments, Swissport
Financing, and Swissport International.
HNA bought Swissport, the world’s biggest ground and cargo handler at airports, for 2.73 billion Swiss francs (US$2.9 billion) in 2015. In January, the Swiss firm said it was considering an IPO
on the SIX Swiss Exchange in Zurich to improve liquidity conditions.
Earlier this week, Swiss airline caterer Gategroup, also a unit of HNA, said it was planning an IPO for around the end of this month to raise 350 million Swiss francs.
Nol van Fenema
rudolf.potlitz@dlh.de (Monday, 12 March 2018 15:12)
See last paragraph!