Jan 10, 2019 (China Knowledge) - China’s HNA Group has sold its stake in a Manhattan office building this week for USD 422 million. The sale represents a loss of USD 41 million for the Chinese conglomerate which initially acquired to building for USD 463 million.
HNA had indicated that it did not have intentions to sell the property but was forced to do so after the building was flagged as a security concern due to its close proximity to Trump Tower when Donald Trump was elected as president.
In addition, the building also houses a police station with security responsibilities for the Trump Tower, leading the U.S. authorities asking HNA to relinquish its control of the property.
While, HNA has been offloading a large portion of its assets including various properties in the U.S. as it looks to bring its debt down to manageable levels, the Manhattan office sale particularly stands out due to the security concerns around it.
The sale by HNA is likely to satisfy concerns from the U.S. government amid heightened tensions between the two countries over trade and other issues such as technological leadership.
Given domestic issues faced by HNA and increasing pressure from the U.S. government, the sale of the Manhattan building at a loss was not unexpected but raises concerns over the how many loss-making deals the company may be forced to make in the future.
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