HNA Group, the Chinese conglomerate that recently went insolvent, has handed over its core aviation unit, including its flagship carrier Hainan Airlines, to strategic investor Liaoning Fangda Group Industrial.

The move comes after the group split its businesses under a bankruptcy reorganisation to settle a debt of around $111bn.

In a statement on social media, HNA said: “Gu Gang, an official appointed by the local government to resolve years-long debt risk at HNA, will no longer serve as the conglomerate’s Communist Party secretary as the reorganisation had made progress.”

This divestment represents one of the last steps of HNA Group’s debt workout.

According to the survival plan revealed in September, the group will be broken into four independent units, the aviation, airport, financial and commercial businesses.

Hainan Airlines recorded an annual loss of $9.9bn for 2020, which is said to be the biggest loss recorded by a listed Chinese firm.

During the 2010s, HNA made acquisitions worth nearly $50bn, largely driven by debt, to establish an empire with shares in diverse businesses.

However, it came under the lens of this heavy spending spree.

Eventually, the group divested assets, including airport services provider Swissport and electronics distributor Ingram Micro.

Following a petition submitted by creditors, a Hainan court placed HNA into bankruptcy administration.

In September, Hainan Airlines announced that Liaoning Fangda Group would become a strategic investor for the airline business post-investment.

In October, Frankfurt Hahn Airport (HHN) filed for bankruptcy at the Bad Kreuznach Administrative Court.

HNA Group owns an 82.5% interest in HHN, with the remaining stake owned by the German state of Hesse.