HNA Group Co. has officially handed over control of its core airline operations to Liaoning Fangda Group Industrial Co., marking the end of an era for the Chinese conglomerate as it continues to restructure one of the country’s biggest piles of corporate debt.

Gu Gang, head of a government taskforce in charge of HNA’s restructuring, will no longer serve as the group’s leading secretary for the Communist Party after the key handover of Hainan Airlines Holding Co., the company said in a statement on social media yesterday. The taskforce will continue its remaining work in handling the group’s reorganization, according to the statement.

“We wish Hainan Airlines and all the brother airlines a safe landing, and rebirth after nirvana!” the group said.

The handover is the latest step in the long dissolution of one of China’s biggest conglomerates. In the 2010s, HNA went on a US$50 billion global acquisition spree, mainly fuelled by debt, to build an empire with stakes in businesses as varied as Deutsche Bank AG to Hilton Worldwide Holdings Inc.

But its spending drew scrutiny from regulators at home and abroad. As concern grew over its mounting debt, it sold assets such as airport services provider Swissport and electronics distributor Ingram Micro to focus on airlines and tourism. But these efforts failed to salvage the company, particularly as COVID-19 wreaked havoc on airlines, leading to HNA’s epic downfall.

As well as Liaoning Fangda taking over the airline, the restructuring also saw HNA bring in state-owned Hainan Development Holdings Co. as a strategic investor for the airport unit.

Once the restructuring is final, HNA and 320 related units will become six independent operations, under airlines, airports, ship manufacturing, hotel, financial services and others.

Headquartered in Beijing, Liaoning Fangda is a conglomerate involved in carbon, steel and pharmaceutical sectors, with four listed units such as Fangda Carbon New Material Co., Fangda Special Steel Technology Co. and Northeastern Pharmaceutical Group Co.

Hainan Airlines reported a third-quarter net loss of 2.56 billion yuan (US$403 million) in October, narrower than a 3.8 billion yuan shortfall the same period a year earlier. Revenue rose 10 percent. (SD-Agencies)