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By Brenda Goh and Stella Qiu

BEIJING  - Creditors of China's HNA Group have applied to a Chinese court for the company to be placed in bankruptcy and restructured, potentially giving a fresh start for the remaining assets of the once-highly acquisitive conglomerate.

HNA Group said in a WeChat post on Friday it had been notified by a Hainan court that its creditors had acted because it was unable to pay its debts. It said it would cooperate with the court.

HNA Group was once one of China's most aggressive dealmaking firms. It used a $50 billion global acquisition spree, mainly fuelled by debt, to build an empire with stakes in businesses from Deutsche Bank to Hilton Worldwide. Its flagship business is Hainan Airlines.

But its spending drew scrutiny from the Chinese government and overseas regulators. As concerns grew over its mounting debts, it sold assets such as airport services company Swissport and electronics distributors Ingram Micro to focus on its airline and tourism business.

It had 706.7 billion yuan ($109.8 billion) in debts at the end of June 2019, the last bond report it made public that year showed. It has not given an update since.

Its largest creditor is the state-backed China Development Bank (CDB), which also chairs the company's creditor committee. CDB did not immediately respond to a request for comment.

CAAC News, the news portal run by China's aviation regulator, said HNA would reduce debt through measures such as converting debt to equity or rollovers to guarantee investors' interests. It also hopes to attract fresh equity from new strategic investors.

It said three of HNA's listed units had applied for bankruptcy and restructuring, which would require approvals from China's securities regulator and courts.

Eight of HNA's onshore listed entities, including Hainan Airlines Holdings and HNA Technology Co, made filings on Saturday to the Shanghai and Shenzhen stock exchanges about their bankruptcy and restructuring proceedings.

Hainan Airlines, HNA's flagship carrier, said one creditor has filed requests to local courts for the company and its units to go through restructuring. The airline said it sees net loss of 58-65 billion yuan ($9-$10 billion) in 2020 versus net profit of 543.2 million yuan the previous year.

The airline warned of the risk it could be delisted should the company be declared bankrupt.

HNA declined to comment.

"China has made the bankruptcy process very efficient for smaller companies. This is a very large, politically connected company that is going to court," said Andrew Collier, managing director of Orient Capital Research.

"It is a good sign that China is cleaning up the bigger, bad companies."

The Hainan provincial government has been involved in the company's debt issues since February last year, after HNA asked authorities to lead a working group to resolve its liquidity risks when the COVID-19 pandemic paralysed travel demand and hit the company's cash flows.

Last week, the company said it was moving to the next stage of resolving its multi-year liquidity crisis as the government-led team had finished its due diligence.

Gu Gang, who was elected as HNA's Communist Party chief this week and leads the government-led working group, sent a letter to HNA employees on Friday that was seen by Reuters. Before his new role, he had served as HNA's executive chairman.

"We've fumbled in a pitch-dark tunnel for three years," he said. "But this time through the work in the past year, we can finally see the light coming through the end of the tunnel ... It is only through bankruptcy and restructuring that we can be reborn."

($1 = 6.4376 Chinese yuan renminbi)

(Reporting by Stella Qiu in Beijing and Brenda Goh in Shanghai; Additional Reporting by Zoey Zhang and Cheng Leng in Beijing, Kane Wu in Hong Kong; Editing by Barbara Lewis, Mark Potter and William Mallard)