State-run Air China Group reportedly held talks to buy the airline assets of debt-ridden HNA Group Co.
Despite offloading several of its assets such as stakes in Brazilian airline Azul, Hilton, and Radisson, HNA it is still billions in debt.
HNA has sold off about $20 billion worth of its huge real estate, transport and tourism portfolio this year.
According to Bloomberg, HNA and Air China began preliminary talks late last year over a sale of HNA’s airlines business which includes Hainan Airlines and several other carriers.
There have been at least two high-level meetings, according to people familiar with the matter.
Air China made an approach after getting an endorsement from the Civil Aviation Administration of China, it reports.
Discussions included HNA’s other airline assets, the people said.
The company acknowledged talks had taken place but says the sale of core business Hainan Airlines is not and never has been on the table.
"Hainan Airlines is not for sale, full stop, and never was, and even the general conversations in question about other airline assets under Hainan Airlines Holding took place months ago," HNA told Bloomberg.
Hainan Airlines is key to the HNA business but it may have little choice but to offload if the price is right due to the huge debt repayments it still faces.
