ANZ Scraps Deal to Sell UDC Finance Arm to China's HNA Group

By David Winning Features Dow Jones Newswires

Australia and New Zealand Banking Group Ltd. scrapped the sale of its UDC Finance unit, which finances vehicles, machinery and other equipment, to China's HNA Group Co. after the deal was recently blocked by a New Zealand regulator.

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ANZ said in a regulatory filing on Friday that it will "assess our strategic options regarding the future of UDC, although there is no immediate requirement to do anything."

It comes after New Zealand's Overseas Investment Office said on Dec. 21 that it couldn't determine which foreign person owned and controlled HNA's local subsidiary, and therefore couldn't sign off on the 660 million New Zealand dollars (US$479.2 million) deal.

HNA, an airlines-to-hotels conglomerate, has announced more than US$40 billion of deals since 2015. It owns stakes in Virgin Australia Holdings Ltd., Deutsche Bank AG and the Hilton hotel chain. Last month, it agreed to buy an Australian refrigerated-transport business for 280 million Australian dollars (US$220.9 million) in cash.

In recent months, however, HNA has faced scrutiny from regulators in the U.S. and some countries where it has done deals. Liquidity pressures have also mounted as investors have become concerned about the group's ability to pay down tens of billions of dollars in debt. HNA now has plans to divest itself of some assets to raise cash.

The company's heightened global profile has led to questions about who controls HNA and whether any of its shareholders have ties to Chinese politicians or government officials. HNA denies that, and named all its beneficial owners in July, identifying a New York charitable foundation as its largest shareholder.

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-Write to David Winning at david.winning@wsj.com

(END) Dow Jones Newswires

January 11, 2018 21:03 ET (02:03 GMT)