By Julie Zhu and Kane Wu
HONG KONG (Reuters) - China's HNA Group said it has made co-founder Chen Feng its sole chairman after fellow chairman Wang Jian died this week, moving to calm concerns about leadership amidst the conglomerate's efforts to slash its massive debt burden.
Wang, regarded as the architect of HNA's $50 billion acquisition spree that pushed it into debt, died on July 3 in what local police said appeared to be an accidental fall from a wall while posing for a photograph.
HNA also said that Adam Tan will continue to serve as chief executive and that the board was committed to "orderly continuity of the company's strategy and operations."
People familiar with the group's strategy told Reuters that HNA was likely to continue with assets sales as agreed with creditors in the months ahead, with one person saying that there would not be any major "directional changes".
They declined to be identified as they were not allowed to discuss internal matters.
HNA's group borrowing, including bank loans and bonds, surged by more than one-third over the first 11 months of last year to 637.5 billion yuan ($96 billion), according to a China bond market filing seen by Reuters in January.
Since then the aviation-to-financial services conglomerate, whose holdings include a stake in Deutsche Bank (DE:DBKGn), has agreed to sell more than $16 billion worth of overseas assets this year, according to Reuters calculations and media reports.
HNA did not immediately respond to a Reuters request for comment about its debt.
"The priority should be to make sure asset sales and debt reduction remain in progress," said Warut Promboon, managing partner at credit research firm Bondcritic. He added that HNA also needed to do more to explain its oft-criticized opaque ownership structure.
The group is controlled by a New York-based foundation and a China-based charity that together hold 52 percent of HNA shares. Wang held a 15 percent stake in HNA, and Chen also holds a 15 percent stake.
Shareholders have promised that in the event of leaving the company or dying they would pass their stakes to the charity fund.
HNA said on Friday that the transfer of the group shares held by Wang will be "addressed in due course, consistent with his pledge to donate them to charity, and in accordance with all applicable legal and regulatory guidelines."
"HNA needs to explain who owns the two foundations," said Bondcritic's Promboon. "Investors want to know who is behind HNA."
Wang told China Economic Weekly magazine in an interview in April, published on Thursday, that it was his proposal that the founder group donate their shares and that it wasn't well received in the beginning.
"It took a long time for everyone to come to understand. I also tried to talk chief Chen into it. I said, children will have their own fortune. If you leave them money, it could do them harm."
Chen co-founded HNA with Wang in 1993. They brought in billionaire investor George Soros as an early investor in the group flagship firm Hainan Airlines (SS:600221) in 1995 and over the years built it up to become China's fourth largest airline.
But while often the public face of the group, it was primarily Wang who was in charge of HNA's strategy and ran day-to-day operations in recent years, sources familiar with the matter have said.
