◼ BUSINESS Bloomberg Businessweek March 9, 202014
● Catering to their green fans, acts are cutting
carbon emissions and waste from their toursMusic Tours Try
To Save the Planet
▼ Cleaning up after the
Glastonbury Festival
in 2019THE BOTTOM LINE HNA went on a massive buying spree in
hopes of becoming a major global conglomerate. But the more than
$85 billion it borrowed to create its empire became its undoing.Chris Martin scored his first big hit in 2000 with a
song called Yellow, but these days, he’s more inter-
ested in green. Coldplay, the band Martin fronts,
announced in November that it wouldn’t go on
tour to promote its latest album, Everyday Life,
until it could find a way to make concerts more
sustainable and beneficial to the environment. The
Dave Matthews Band said in January it would offset
carbon emissions created by its 2020 summer tour
by planting a million trees. And electronic dance
pioneer Massive Attack is planning to tour Europe
by train, considered a more eco-friendly mode ofoverseas buyers for security reasons.
By then, HNA was facing pushback at home. As
several acquisitive conglomerates—including Anbang
Insurance Group, Dalian Wanda Group, and Fosun
International—expanded their global empires, the
Chinese government fretted about whether their
borrowing could pose a threat to the nation’s econ-
omy. Banking and foreign-exchange regulators
began reviewing their deals, and officials signaled
the companies would be expected to rein in their
ambitions. The state’s most dramatic move came
early in 2018, when China’s insurance regulator took
control of Anbang, saying intervention was needed
to head off threats to its solvency. The company’s
founder ultimately received a prison sentence.
HNA was stepping up its own sales as the
Anbang seizure unfolded, unloading assets that
included shares in Hilton and Deutsche Bank, U.S.
and Australian office towers, and the site of Hong
Kong’s old Kai Tak airport, where it planned an
ambitious real estate project. By last spring, the fire
sale topped $25 billion. There were obvious signs,
though, that the disposals weren’t raising enough
money to cover HNA’s debts. In April an HNA unit,
CWT International Ltd., missed payments, prompt-
ing creditors to seize some assets; soon after, HNA
failed to repay a 1.5 billion yuan ($215 million) bond.
Through it all, HNA insisted that it intended to
refocus on its core of running airlines and related
travel businesses. But trouble found it even in those
industries. Before the coronavirus outbreak began
in late December, the company was struggling to
keep alive Hong Kong Airlines, a carrier it once
hoped to develop into a rival to the city’s flagship
carrier, Cathay Pacific Airways Ltd. In December,
airport authorities impounded seven Hong Kong
Airlines planes after it fell behind on its bills.
It’s conceivable HNA might have limped on in
the absence of the virus, selling assets just fast
enough to keep a step ahead of its many creditors.
But it’s also fair to argue that its ultimate demise
was only a matter of time, and this winter’s surprise
crisis in China merely moved it up a few months.
Either way, it will serve as a cautionary tale.
“We’ll continue to witness more Chinese compa-
nies ambitiously extending their footprint globally,
but I think they will become more rational than what
we have seen in recent years,” says Lu Zhengwei,
chief economist at Industrial Bank Co. in Shanghai.
“After all, you would be more cautious after seeing
your peers hit hard back to the ground.” �Matthew
Campbell, with Daniela Wei