Chen Feng and 245 Park Avenue (Credit: World Travel and Tourism Council via Flickr, 245 Park Ave, and Wikipedia)
HNA Group chairman Chen Feng will likely play a larger role in steadying the debt-laden company following the sudden death of co-chairman Wang Jian Tuesday.
Chen, 65, was suddenly thrust into the sole leadership role at the company when the 57-year-old Wang died from a 49-foot fall while posing for a photograph in France, Bloomberg reported.
“Chen Feng has been retiring himself from day-to-day management over the years and a lot of the responsibilities have been concentrated around Wang Jian,” Yu Zhanfu, a partner at Roland Berger Strategy Consultants based out of Beijing, told Bloomberg.
“Chen Feng is now crucial in helping stabilize sentiment in the company. He will also be the most important person to relay key messages to the outside world about HNA going forward and he needs to be more proactive,” Zhanfu said.
Wang lost his balance while climbing on a retaining wall in the scenic French region of Provence, French authorities said.
He owned about 15 percent of HNA Group and was instrumental in its growth.
Cheng, along with key managers like chief executive officer Adam Tan, is trying to stabilize a company that didn’t generate enough profits to pay its debt service last year. The company’s short-term debt climbed to $29 billion last year, exceeding its cash reserves. And HNA is facing high borrowing costs.
“HNA’s got to put up with higher financing costs just to get funding access, up until they reach a stage where they have sufficiently de-levered,” said Jin Rui Oh, a senior analyst at United First Partners. “Just do what the government wants — De-leverage and divest.”
The Chinese government has reportedly stepped in to help the company.
Here in New York City, HNA recently sold the office building it owned with MHP Real Estate Partners at 1180 Sixth Avenue for $305 million, and is reportedly in talks to sell a stake in 245 Park Avenue to SL Green Realty, New York’s largest commercial landlord. [Bloomberg, Bloomberg] – Rich Bockmann
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