Auto Holdings China Deal Frozen By FIRB
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As was widely expected Chinese group HNA will not purchase Automotive Holdings refrigerated transport business for $400 million by the end of June.
The debt-laden Chinese group HNA blames the Foreign Investment Review Board for the delay in assessing the deal that was first revealed late in 2017.
But analysts say the real reason is HNA’s debt problems in china where it is under pressure to sell non travel related businesses, especially offshore. It is why for example HNA has sold some of a 9.9% stake in Deutsche Bank and offloaded property in Australia and other countries.
AHG, Australia’s biggest listed car retailer, said yesterday the sale would not be completed on time, as HNA had yet to receive FIRB approval of the $400 million deal.
HNA, it said, expected to receive notification of FIRB’s decision tomorrow, meaning the decision will not be publically announced until early July.
AHG also disclosed that HNA wanted to amend some parts of the sale agreement, though the sale price remained unchanged.
The doubts have weighed on AHG’s share price, which has dropped from $3.80 in early March to $2.75 at the close yesterday (down 2.1% on a day when the market battled higher despite falls offshore).
Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.
At the AFR he was a finance writer, Finance Editor, News Editor and Chief of Staff. At the Nine Network he was supervising producer of Business Sunday for more than 16 years. He has also written for other online and analogue print publications here and overseas.