The Committee on Foreign Investment in the US, which assesses deals posing potential national-security risks, raised concerns about some “unique facts and circumstances” regarding the location of the building, a representative for the Chinese company said in a statement. Those issues didn’t exist when HNA bought the 850 Third Avenue property, according to the statement.
The 21-story building houses one of only two police precincts that are within a mile of Trump Tower, the president’s base when he’s in New York. HNA said it’s taking steps to address concerns voiced by the committee, without providing further detail.
HNA also denied a New York Post report that President Donald Trump’s administration is poised to seize a majority stake in the building, which the debt-saddled company has been looking to unload. “There is no seizure or forced sale of 850 Third Avenue underway or pending, and it is grossly inaccurate and misleading to suggest otherwise,” it said.
Trade War
The scrutiny comes amid rising tensions between the US and China’s government, which is said to have decided to help HNA pull itself out of recent liquidity challenges. The Chinese conglomerate, which has sold more than US$17 billion in assets to reduce its massive debt load, has been marketing the Manhattan building among several properties it is considering selling.
Trump has been zeroing in on Chinese investment in the US amid his escalating trade war with the world’s second-largest economy.
The increased attention has seen some high-profile deals scuppered, such as Chinese billionaire Jack Ma’s attempt to buy Dallas-based payment provider MoneyGram International. Broadcom Ltd.’s US$117 billion attempt to buy California’s Qualcomm Inc. — which would have been the largest tech deal in history — was shot down on concerns the merger would benefit China’s emerging telecommunications giant Huawei Technologies Co.
Other HNA building sales
Plans to bolster CFIUS’s powers may mean more deals get into trouble. The body’s reach may be expanded under a bill that Congress is expected to pass in August.
This isn’t the first time HNA has crossed CFIUS’s radar. In late April, it abandoned plans to buy SkyBridge Capital from former White House Communications Director Anthony Scaramucci after waiting months for approval from the body. The group has also faced heightened scrutiny across its holdings worldwide, partly because of questions about its ownership.
HNA agreed to buy the 850 Third Avenue building before Trump was elected. The company has become a poster child for a swathe of Chinese acquirers that sought out high-profile deals around the world before the government started reining them in last year amid concern about unsustainable corporate debt levels.