China’s HNA investment bank is divesting from Germany’s legally embattled Deutsche Bank group.
The lender exercised an option to sell 26,8 million shares for €363 million. The shares were sold far above current market prices as HNA had hedged its investment in Deutsche Bank with buy-back options.
HNA, whose part owner is Grand China Air – a Haikou-based airline which previously held a 25% minority share in hospitality company Hilton Worldwide – is planning to completely withdraw its 10% share from Germany’s biggest lender.
HNA Group is involved in numerous industries including aviation, real estate, financial services, tourism, and logistics. The company is in the process of bolstering its own liquidity, seeking to sell $20 billion worth of assets as it faces its own crisis.
Deutsche Bank was at one time one of HNA’s most prestigious acquisitions, but after the lender was forced to shed assets worth $17 billion, including its holdings in Hilton Worldwide, the Brazilian air carrier Azul, and China-based West Air, HNA began looking at relinquishing its assets in Deutsche Bank.
The major German lender is currently embroiled in a series of legal battles stemming from multiple money laundering scandals involving Estonia-based Danske Bank and accusations that it violated the international sanctions levied against Russia in 2014 after Moscow invaded neighbouring Ukraine. Its shares have continued to slump amid several highly unsuccessful turnaround efforts.
Deutsche Bank’s acquisition by HNA was the lender’s co-founder, Wang Jian, who died during an accidental fall in France in July 2018.
The withdrawal by HNA now creates room for Cerberus Capital, a US firm that also owns shares in Deutsche’s rival Commerzbank, to move in with a proposal for a potential merger, a move that has been given a tacit nod of approvement by the German government.