HNA cuts Deutsche Bank stake as Chinese conglomerate plans exit

HNA
Signage for HNA Group Co. is displayed atop the company's building in Beijing, China, on Thursday, Feb. 1, 2018. Photographer: Giulia Marchi/Bloomberg

Deutsche Bank AG’s top investor, HNA Group Co., continued to reduce its stake in the German lender as the debt-laden Chinese conglomerate prepares to exit one of its most high-profile purchases.

HNA’s C-Quadrat unit exercised options to sell 26.8 million Deutsche Bank shares for 363.4 million euros ($410 million), reducing its ownership to 6.3 percent, according to a filing with the Securities and Exchange Commission. The shares were sold at prices ranging from 11.45 euros to 16.70 euros apiece, far above current market prices, because the Chinese group had hedged its investment in Deutsche Bank with put options. Deutsche Bank shares closed at 7.752 euros in Frankfurt on Friday.

The deal marks the latest disposal for HNA, which was one of China’s most acquisitive companies until it began facing liquidity challenges and pressure from the government. Since last year, the Chinese conglomerate has agreed to sell more than $20 billion of assets ranging from property to big shareholdings.

HNA plans to dispose of its entire stake in Germany’s largest lender, people briefed on the matter have said. The Chinese group once held almost 10 percent of Deutsche Bank. In July of last year C-Quadrat transferred options on more than 26 million of its Deutsche Bank shares to JPMorgan Securities Plc.

HNA has long been a controversial shareholder for Deutsche Bank. Former CEO John Cryan initially refused to meet with its executives, people familiar said at the time. He eventually relented when the issue fueled tensions with Deutsche Bank Chairman Paul Achleitner, who was personally involved in wooing the investor.

Bloomberg