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Overview

China Eximbank provides loan to HNA Group for its acquisition of 20% stake in NH Hoteles S.A.

Commitments (Constant USD, 2023)$224,872,168
Commitment Year•2013Country of Activity•SpainDirect Recipient Country of Incorporation•China (People's Republic of)Sector•Business And Other ServicesFlow Type•Loan

Status

Project lifecycle

Completion

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Jan 1, 2013
Start (actual)
Apr 17, 2013
End (actual)
Apr 17, 2013

Stakeholders

Organizations involved in projects and activities supported by financial and in-kind transfers from Chinese government and state-owned entities

Ultimate beneficial owners

At least 25% Chinese ownership

Funding agencies

State-owned Policy Banks

  • Export-Import Bank of China (China Eximbank)

Receiving agencies

Private Sector

  • HNA Group Company Limited

Collateral providers

Private Sector

  • HNA Group Company Limited

Loan description

China Eximbank provides loan to HNA Group for its acquisition of 20% stake in NH Hoteles S.A.

Interest type•Unknown

Collateral

The loan was reportedly collateralized with shares in NH Hoteles S.A.

Narrative

Full Description

Project narrative

In 2013, the Hainan Branch of the Export-Import Bank of China entered into a merger & acquisition (M&A) loan agreement with HNA Group Company Limited (a Chinese private conglomerate company) for its acquisition of a 20% stake (61,654,358 ordinary shares valued at €2 EUR each) in NH Hoteles S.A. — a Spanish hotel operator that is listed on the Madrid Stock Exchange listed company — for a consideration of €234,286,560.40 EUR. The loan was reportedly collateralized with shares in NH Hoteles S.A. NH Hoteles is a Spanish hotel chain that operates 400 hotels across 25 countries, primarily 25 countries. Previously, in May 2011, HNA Group signed an agreement with NH Hoteles to acquire a 20% stake for a total consideration of €431.6 million EUR ($610.7 million USD) at a price of €7 EUR ($9.90 USD) per share, becoming the company's second largest shareholder. However, in 2012, HNA pulled out of this deal because of financial issues in Europe. Then, in February 2013, HNA entered into a deal to acquire a 20% stake in NH Hoteles for a consideration of €234 million EUR ($306 million ISD) at €3.80 EIR ($5 USD) per share -- a significant discount from the May 2011 proposed acquisition. The acquisition was expected to help the debt-riddled NH Hoteles. The acquisition was completed on April 17, 2013, with the acquisition increasing the capital of the company by €123,308,716 EUR. By March 2014, HNA Group's stake in NH Hoteles had grown to a 29% stake. HNA Group repaid the China Eximbank acquisition loan by selling some shares of NH Hotel.

Staff comments

1. The Chinese project title is 并购NH Hotel贷款. 2. The face value of the China Eximbank loan is unknown. However, given that the total cost of the acquisition was €234 million EUR and most China Eximbank M&A (overseas investment) loans cover at least 70% of the total cost of the acquisition, AidData assumes for the time being that the face value of the China Eximbank loan was roughly equivalent to €163.8 million EUR. This issue warrants further investigation. See slide 13 of https://www.dropbox.com/scl/fi/l59pewju61dhll79k8msy/2.EXIM-Bank.pptx?rlkey=4ffouewoknm33jnz3dykii2i4&dl=0 for more information on the standard terms and conditions that govern M&A (overseas investment) loans from China Eximbank. 3. HNA Group, a conglomerate with major businesses in aviation, holdings, capital, tourism and logistics in the People's Republic of China and the owner of China's fourth-largest airline.