(Yicai Global) Sept. 13 -- HNA Group, a Chinese aviation-to-financial services conglomerate undergoing bankruptcy restructuring, has chosen Fangda Group Industrial as the strategic investor in its flagship aviation business, Hainan Airlines Holding. The carrier’s shares fell.

Liaoning province-based Fangda will become Hainan Airlines’ controlling shareholder once the deal is completed, the carrier said in a statement late yesterday. A second meeting of creditors still has to vote it through.

Fangda is mainly an iron and steel conglomerate, but offered the highest price in the final bidding round, beating out Yuyuan Tourist and Juneyao Air, Yicai Global learned. Fangda also has a successful track record of rescuing companies on the verge of bankruptcy, including Nanchang Iron and Steel and Pingxiang Iron and Steel, according to metal industry insiders.

Though Fangda does not have the financial strength of the other two bidders, the administrators of HNA’s restructuring program took its willingness to make the highest offer as an indication of its determination to help HNA resolve its debt problem, which is the group’s top priority, people familiar with the matter told Yicai Global.

Juneyao Air said in April that it planned to stump up CNY5 billion (USD771.5 million) for a consortium interested in HNA’s aviation assets. A month later, Yuyuan Tourist said it was setting up a CNY40 billion (USD6.2 billion) fund to target the same assets.

Shares of Hainan Airlines [SHA:600221] ended the day 4.8 percent lower at CNY2.36 (37 US cents) each, after earlier dropping by as much as 5 percent, the exchange-imposed lower limit set for stocks in special treatment.

HNA’s debt repayment crisis began at the end of 2017 following a USD50 billion global acquisition drive. The Hainan High People’s Court declared Haikou-based HNA bankrupt this March and ordered it to begin restructuring. The Hainan provincial government had set up a working group in February to promote risk resolution and debt restructuring at the group.

HNA has received claims from more than 60,000 creditors, involving over CNY1.2 trillion (USD186 billion), according to their first meeting.

Editors: Tang Shihua, Futura Costaglione