HNA Technology, an investment vehicle of China’s HNA Group, has entered into an agreement with US-based investment firm Platinum Equity to sell its wholly owned subsidiary Ingram Micro, a provider of logistics technology solutions and services for $7.2bn, as the company is eagerly looking to solve its heavy debt issues.
HNA Technology, formerly Tianhai Investment, and before that known as Tianjin Marine, acquired Ingram Micro in 2016 for $6bn. The deal raised concerns from the Shanghai Stock Exchange as the total assets of Tianhai Investment stood at around $1.94bn at the time. The company eventually completed the acquisition with a large amount of loans.
Later in the year, Tianhai Investment disposed of its entire shipping business and switched its focus to supply chain technology.
In early December, HNA Technology announced that the company defaulted on a total of $1.35bn of loans borrowed for the Ingram Micro acquisition and the company has been negotiating with a number of financial institutions to postpone payments.
HNA Technology said the sale of Ingram Micro will ease the company’s financial pressure and the company is planning on a business transformation to enhance its profitability.
“We are pleased to have reached an agreement that delivers a strong return on HNA’s investment while ensuring that Ingram Micro has a partner committed to investing in its future growth,” said Wang Duan, president of HNA Group North America.
Following the disposal of its IT solution business, HNA Technology is looking to re-enter the shipowning sector.
HNA Technology has announced the acquisition of two 2012-built 176,000 dwt capesize bulkers Bulk Harvest and Bulk Joyance from Puhang Leasing for RMB145.5m ($22.2m) each, much higher than VesselsValue’s valuation of about $17m on the vessels.
In the meantime, the company has added a number of shipping business to its business scope including international liner shipping, international freight forwarding, NVOCC business and international shipping agency.
HNA Group is dealing with a huge debt crisis with total liabilities amounting to RMB700bn ($107bn).
HNA’s previous shipping foray was led by defunct subsidiary Grand China Logistics, one of China’s most high profile boom and bust shipping cases.