As its total debts persisted at levels above CNY700 billion yuan (USD100 billion), HNA Group admitted in a WeChat post on February 29 that it was no longer able to deal with its liquidity risks itself and asked the government of China’s Hainan province to lead a working group to help solve the issue.

However, it clarified in a separate statement on March 1 that adjustments to its management structure did not involve changes in the actual control of the group and would not affect daily operations.

The conglomerate, which holds stakes in or owns several Chinese carriers, including Hainan Airlines (HU, Haikou), has been under intensifying pressure since the Covid-19 coronavirus outbreak brought widespread route and frequency cancellations.

The new joint working group “will fully assist in advancing the group’s risk mitigation work. Since the liquidity risk broke out in late 2017, with the support of all parties HNA Group has actively carried out a ‘self-rescue’ but failed to completely resolve the risk,” the WeChat post said. “Affected by the acute coronavirus epidemic in 2020, the liquidity risk will increase.”

The leader of the joint working group is Gu Gang, chief director of Hainan Development Holdings Co., Ltd., an investment arm of the Hainan provincial government, the post added. In contrast, deputy team leader is Hainan Yangpu Economic Development Zone management committee director Ren Qinghua.

Also involved in the team are officials from the Civil Aviation Administration of China’s Central and Southern Regional Administration and China Development Bank.

The news follows two weeks of bankruptcy rumours and speculation that the Chinese government was preparing to take over HNA Group and sell off its airline assets to carriers such as Air China and China Eastern Airlines because the outbreak had further weakened its ability to meet financial obligations.

HNA will add two more seats to its five-member board of directors, it said in its statement on March 1. Gu Gang becomes its executive chairman, but HNA co-founder Chen Feng will remain chairman of the board. Ren Qinghua is the other new member, also becoming joint-CEO alongside Tan Xiangdong.

HNA Group’s total assets were CNY980.6 billion (USD140.5 billion) at the end of June 2019, a year-on-year decrease of 8%, while total liabilities were CNY706.7 billion (USD101.3 billion), a 6% decrease year-on-year, local media reported.