With an Eye on HNA, Shanghai Asset Manager Pledges 4 Billion Yuan to Investment Pool

What’s new: Shanghai-listed asset manager Shanghai AJ Group Co. Ltd. (600643.SH) plans to invest up to 4 billion yuan ($621 million) in a 30 billion yuan partnership with carrier Juneyao Airlines Co. Ltd. (603885.SH), according to a Friday filing (link in Chinese) to the Shanghai Stock Exchange.

The joint investment partnership may seek to buy airline assets from the troubled HNA Group Co. Ltd., Caixin has learned from sources close to the matter.

Juneyao Airlines plans to invest 5 billion yuan in the partnership, and its shareholder Shanghai Juneyao Aviation Investment Co. Ltd. and other strategic investors will commit as much as 24.95 billion yuan, according to Juneyao’s April statement.

The background: HNA is seeking strategic investors for its airline, airport and retail businesses as part of its bankruptcy restructuring. In March, a court in Hainan approved the inclusion of the giant conglomerate and 320 related companies in a single bankruptcy reorganization.

Other companies have also shown interest. Shanghai Yuyuan Tourist Mart Group Co. Ltd. (600655.SH), a retail unit of conglomerate Fosun International Ltd., said Wednesday that it plans to set up a 40 billion yuan joint venture with affiliates and strategic investors to buy into airline companies. A source close to Fosun told Caixin that the new venture aims to bid for HNA’s airline assets.

In 2020, AJ Group booked a net profit of 1.35 billion yuan, up 2.51% year-on-year, according to its annual report (link in Chinese).

Quick Takes are condensed versions of China-related stories for fast news you can use. To read the full story in Chinese, click here.

Denise Jia and Han Wei contributed to this report.

Contact reporter Timmy Shen (hongmingshen@caixin.com) and editor Heather Mowbray (heathermowbray@caixin.com)

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