A consortium, led by HNA Aviation Group Co., Ltd. (“HNA Aviation”), recently completed its HK$3 billion strategic investment in Hong Kong Airlines giving effect to the US$6.2 billion debt restructuring of Hong Kong’s second largest airline.
In the face of financial difficulties and the impact of the COVID-19 pandemic, Hong Kong Airlines undertook a holistic restructuring. In a landmark restructuring deal involving an unprecedented parallel restructuring process in the UK under the newly-enacted UK restructuring plan and a Hong Kong scheme of arrangement, the restructuring was approved by the English and Hong Kong courts on 9 December and 14 December 2022 respectively. On 19 April 2023, the consortium led by HNA Aviation successfully injected HK$3 billion into Hong Kong Airlines by way of a strategic investment. The court-approved restructuring came into effect on 26 April 2023.
The strategic investment by the HNA Aviation-led consortium, which was a vital component of Hong Kong Airlines’ successful restructuring, will accelerate the recovery of Hong Kong Airlines, shore up market confidence as Hong Kong’s aviation industry begins its recovery and Hong Kong re-opens post-Covid.
As legal counsel to the consortium, the KWM team advised on every aspect of the investment, including deal structuring, preparing and negotiating the full suite of transaction documents, as well as advising on the restructuring plan.
The KWM team was led by partner Jia Liu, with Director of Restructuring & Insolvency Tony Chow providing advice on the debt restructuring, Head of KWM’s Hong Kong Funds team and partner Jingjing Jiang assisting in establishing a Hong Kong limited partnership fund, and Banking & Finance partner Ashley Wong advising on compliance and regulatory matters. The core team members included Xinnan Li, Mengyao Liu and Liwen Wu.
*Any reference to "Hong Kong" shall be construed as a reference to the "Hong Kong Special Administrative Region of the People's Republic of China".
