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Report: China's capital controls reason for HNA-Rezidor deal delay

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Report: China's capital controls reason for HNA-Rezidor deal delay

Mainland China's regulations for local companies doing business abroad are causing the delay in HNA Group's bid to take over Brussels-based hotel group Rezidor Hotel Group AB, Reuters reported, citing two sources familiar with the matter.

The Aug. 1 report noted that the Chinese conglomerate's HNA Sweden Hospitality Management AB is unable to take capital abroad to fund its offer for Rezidor, as it needs regulatory and government clearance to do so.

HNA's pursuit of Rezidor started in December 2016, after it was required by Swedish law to launch a mandatory offer for the company after its Rezidor stake increased to 51.3%. The offer has since been extended multiple times, with the latest closing date set as Sept. 29. HNA also decreased its offer for Rezidor shares to 34.38 Swedish kronor per share from 34.86 kronor apiece.

The Reuters report follows earlier media reports noting the China Banking Regulatory Commission's investigation of acquisitive Chinese conglomerates, including HNA Group. The company also recently postponed a plan to list a real estate investment trust in Singapore.

Representatives from the concerned companies refused to comment on the report, Reuters noted.

As of Aug. 1, US$1 was equivalent to 8.11 Swedish kronor.