No bank wants to do business with TAP’s Chinese shareholders

  • ECO News
  • 21 July 2017

The Chinese from the HNA, who have a stake in the Portuguese airway TAP, are having a hard time in Wall Street: the fear of a high debt is increasing among banks.

TAP’s Chinese shareholders are having a hard time in making deals with North-American funds. This time, it’s the Bank of America that is warning investment bankers to stop supporting transactions from the HNA group for now, following other financial institutions’ policy (such as Citigroup or Morgan Stanley).

In Wall Street, there are several investment banks who are avoiding HNA’s counseling and financing operations, simply because they could not get committees approval to confirm businesses with entities, Bloomberg discloses.

In the investment unit of Bank of America Merrill Lynch, bankers were informed that they should stop attempting to aid new acquisitions and raising capitals; it is said that it was the Bank of America itself who excluded itself from getting involved in HNA transactions. A source quoted by Bloomberg recalled that HNA did not pay commissions to the Bank of America in the past few months within the aid the bank gave to some of the Chinese group transactions.

This year, HNA was also supported by a union from JPMorgan Chase and UBS in acquiring 25% of the Hilton hotel chain for 6.5 billion euros and an almost 10% equity in Deutsche Bank.

The ECB needs to look after HNA’s presence in DB. The central banks wants to know if the investor is or isn’t credible and financially steady, and also what is the origin of the money they use to invest. ECB also wants to analyse criminal records in order to remove any illegality from the shareholder either with money laundering or terrorism financing.