Industrials

HNA Group Faces US Regulatory Scrutiny Over Manhattan Building

0 votes $4.82

China’s HNA Group faced regulatory scrutiny by the Committee on Foreign Investment in the United States (CFIUS) due to concerns over its ownership of an office tower in midtown Manhattan, Bloomberg reported on August 9. Located on 850 Third Avenue, the building is only four blocks away from the Trump Tower and raises potential national security concerns. The Chinese conglomerate admitted that there are “unique facts and circumstances” regarding the location, but denied any “seizure or forced sale” of the property.

Join Now

In 2016, HNA acquired the 617,000 square foot office building in partnership with MHP Real Estate Services, a minority stakeholder, for a total of USD463m. In July, MHP was informed by HNA that the latter’s stake had been placed into a trust, according to a source with direct knowledge of the matter. Amid recent escalating trade disputes, the US is paying increased attention to Chinese investment deals. For instance, earlier in April, HNA’s plan to purchase investment firm SkyBridge Capital from former White House Director of Communications Anthony Scaramucci was also terminated by CFIUS. Domestically, the debt-ridden conglomerate is said to be pressured by the Chinese government over its high debt and subsequently offloaded USD17bn of assets to cut leverage.

Xinyi (Lorraine) Zhu