HNA Group is in discussions to sell some or all of its 25 percent stake in Hilton Grand Vacations Inc., the timeshare business spun off last year from Hilton Worldwide Holdings Inc., the Wall Street Journal reports, citing unnamed sources.
The Chinese conglomerate’s stake in Hilton Grand Vacations is worth about US$1.2 billion. On paper, HNA could make a profit of nearly US$570 million, before accounting for leverage that could further boost its windfall, the newspaper said.
HNA would sell its shares on the open market and not to a direct buyer, the sources told the Journal, but added that its plans could changes.
In 2016 the company agreed to buy a 25 percent stake in Hilton Worldwide from private-equity firm Blackstone Group LP for US$6.5 billion.
The following year Hilton Worldwide split itself into three publicly traded companies – Hilton Worldwide, Hilton Grand Vacations, and Park Hotels & Resorts Inc. – giving HNA a 25 percent stake in each of the three.
Since then, the price of HNA’s shares in Grand Vacations has nearly doubled, WSJ said.
HNA is selling some of its assets around the world to reduce its debt following the central government’s clampdown on aggressive acquisitions overseas.
It is also restructuring many of its listed units in mainland China and Hong Kong.
One of the sources told the Journal that HNA hopes to generate capital for new acquisitions by disposingof older investments that have been successful.
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