HNA targets global transport platform

GE SeaCo, which claims to be the fifth-largest player in the global marine container leasing industry, was purchased for $2.5 billion, including debt. General Electric will receive $500 million for its 50% stake in the company plus related assets, and shipping container group SeaCo will receive $528 million for its 50% share.

HNA and Bravia were believed to have outbid private equity firm Kelso to secure the deal, as well as pledging to drastically grow the company over the 18 to 24 months.

“Our company currently owns and operates China’s fourth largest port, a fleet of 30 container ships and a container ship finance arm,” Adam Tan, executive director of HNA, said in a statement. “GE SeaCo fills an important gap critical to our ongoing growth.”

The GE SeaCo acquisition was announced one day after HNA and Bravia finalized their investment in Istanbul-based ACT Airlines for an undisclosed sum. HNA’s investment was made under its Grand China Logistics Group, which claims to be the first air-land-sea and conglomerate logistics company in China.

HNA, now China’s largest privately owned transport company, has emerged as one of the country’s better-known corporates. The group earned its stripes by managing Hainan Airlines, the country’s fourth-largest airline carrier, and owns department store group Minsheng, an airport operator, a logistics company and a hotel operating company.

Global investor George Soros is among its backers, owning 18.6% of HNA’s Grand China Air.

HNA is poised for further growth given market conditions. China Logistics expert Mark Millar of M Power Associates says China’s air cargo market shipped 5.6 million tons of materials in 2010, and this is forecast to grow 10% annually through 2015. Yet, only one-third of this cargo is carried on Chinese Airlines, leaving a gap in the market.

According to Sam Chambers, a logistics analyst and contributor to Supply Chain Asia, HNA has ambitions to be a leading logistics player in the world, and the group may have the know-how to achieve it. HNA has outpaced other corporates by allocating more for M&A spending, and its brand is recognized for quality, which resonates with offshore business partners.
“In Hong Kong, it has ambitions to take on Cathay with a planned order of 10 A380s for subsidiary Hong Kong Airlines,” Chambers says. “HNA Group will go global, and is not saddled with the see-saw management that has blighted China Eastern and Air China for so long.” 

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• Topics
• Greater China
• MENA
• Bravia Capital