German state of Hesse challenges HNA over lack of communication on Hahn Airport
The German federal state of Hesse is concerned about a lack of communication from HNA Group, which last year acquired Hahn Airport near Frankfurt
THE German federal state of Hesse is concerned about a lack of communication from Chinese conglomerate HNA Group, which last year acquired Hahn Airport near Frankfurt. HNA Group owns 82.5% of Hahn's shares, and Hesse owns the remaining 17.5%.
Hesse finance minister Thomas Schaefer (from the conservative CDU) recently told a German newspaper that the state government would like to convene a shareholders’ meeting but had found it difficult to get a response from HNA.
Schaefer made it clear that Hesse would insist on enforcing its rights, and that if HNA did not comply with the request to convene a shareholders' meeting, Hesse will convene one itself.
Schaefer's spokesman, Ralph-Nicolas Pietzonka, told German media that as of early March the Hesse government had not yet received an answer to a letter sent in mid-January.
Hahn is located 120 kilometres from Frankfurt. It services mostly cargo and low-cost carriers, notably Ryanair but also TUI fly and Wizz Air. A lack of rail connections has hindered its growth, and since last year Ryanair also flies out of Frankfurt International, the biggest airport in Germany.
Hesse remains prepared to sell its minority share in Hahn, and HNA has been regarded as the obvious candidate. But given the lack of contact, Hesse is concerned about the reliability of HNA as a partner.
The situation with Hahn is complicated by the fact that, though it is regarded as Frankfurt's second airport, it is not actually located in the same state as Frankfurt (Hesse), but in neighbouring Rhineland-Palatinate (or Rheinland Pfalz).
HNA Group completed the acquisition of an 82.5% stake purchase in Hahn back in August 2017, having announced the deal in March. The transaction was valued at 15.1 million euros (US$15.8 million). The stake was sold by the state of Rhineland-Palatinate.
At the time HNA Group issued the following statement regarding the closing of the transaction:
“We are pleased to complete the acquisition of Frankfurt-Hahn Airport, which we believe will accelerate the growth of our airport and airport services businesses. This strategic investment will also enable us to increase the value chain and services that we provide through our core global tourism and logistics verticals. We look forward to working closely with the local authorities, the region’s talented workforce and the community as we invest in Frankfurt-Hahn’s infrastructure to enhance its capacity. We believe the airport can become a leading hub of commerce between China and Europe in support of China’s “One Belt One Road” initiative.”
At the time, the states of both Hesse and Rhineland-Palatinate were happy to welcome a new majority shareholder with deep pockets. However, since then HNA has run into difficulties with the Chinese authorities and is in the midst of a global selloff of assets in order to pay down debt and deleverage its balance sheet.
Nonetheless, infrastructure such as an airport inside the European Union fits in well with the Belt Road vision of President Xi Jinping, and it could be kept as a core asset, while properties such as real estate are sold off.
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14 Mar 2018