HNA of China, in Need of Money, Raises Funds From Employees
- 6 years ago
HNA of China, in Need of Money, Raises Funds From Employees
It was one of many pitches by HNA Group, a Chinese conglomerate struggling under an estimated $90 billion in debt accumulated during a global shopping spree
that included buying stakes in multinationals like Hilton Hotels and Deutsche Bank.
The company has long offered such investments to its employees as a way to incentivize them
and to share in the company’s success, Thomas A. Clare, an attorney for HNA, said in an email.
In an email dated Jan. 4, one HNA unit told employees that it needed nearly $8 million to fund a duty free business.
A small company in the southeastern Chinese city of Wenzhou called Wenzhou Liren Educational Group made national news in 2011 after it went bankrupt
and was unable to pay nearly $790 million it borrowed from employees and local residents.
“HNA has never approached the offering of these products
and opportunities as a financing mechanism, as the amounts contributed by HNA employees to these opportunities are a very small percentage of the funds raised,” he said.
One week later, HNA’s media and entertainment arm said it was looking to raise nearly $80
million from employees, pledging strong returns and a plan to build up the business.
It was one of many pitches by HNA Group, a Chinese conglomerate struggling under an estimated $90 billion in debt accumulated during a global shopping spree
that included buying stakes in multinationals like Hilton Hotels and Deutsche Bank.
The company has long offered such investments to its employees as a way to incentivize them
and to share in the company’s success, Thomas A. Clare, an attorney for HNA, said in an email.
In an email dated Jan. 4, one HNA unit told employees that it needed nearly $8 million to fund a duty free business.
A small company in the southeastern Chinese city of Wenzhou called Wenzhou Liren Educational Group made national news in 2011 after it went bankrupt
and was unable to pay nearly $790 million it borrowed from employees and local residents.
“HNA has never approached the offering of these products
and opportunities as a financing mechanism, as the amounts contributed by HNA employees to these opportunities are a very small percentage of the funds raised,” he said.
One week later, HNA’s media and entertainment arm said it was looking to raise nearly $80
million from employees, pledging strong returns and a plan to build up the business.