FRANKFURT/ZURICH, Dec 8 (Reuters) - China's HNA Group, which has started selling off assets to allay liquidity concerns, is pushing for a flotation of its Swiss airline caterer Gategroup Holding early next year, people close to the matter said.
The company may attract a valuation of more than 10 times its expected core earnings -- or more than 2 billion Swiss francs ($2 billion) including debt -- in an initial public offering, the people said.
Bought by HNA last year for $1.5 billion, Gategroup is aiming to list in Zurich at the beginning of the second quarter and expects to complete its line-up of advisers soon.
HNA is expected to float a stake of around 50 percent with a view to reaping the maximum proceeds from the deal, while retaining control.
Credit Suisse and UBS are organizing the planned IPO as what are known as global coordinators.
While banks usually rush to pitch for mandates including the more junior bookrunners and co-lead managers, a number of banks declined when asked if they wanted to be part of the consortium of IPO organizers because of concerns over HNA.
HNA's buying binge worth more than $50 billion over two years has prompted increased scrutiny from regulators and bankers due to announced changes to HNA's shareholding structure and its use of leverage.
Swiss regulators have announced they are evaluating what they see as "untrue" or "incomplete" information given by the Chinese group during its takeover of Gategroup in 2016. HNA said that it had provided all necessary information
"Especially U.S.-based banks have said that they will not offer any services on reputational issues," a person close to the matter said. Another person said that some European banks are also avoiding HNA.
Gategroup declined to comment, while HNA was not immediately available for comment.
HNA Group on Friday sought to allay growing concerns that the conglomerate is facing a liquidity crunch and may need to dispose some recent acquisitions, including stakes in Deutsche Bank and Hilton.
Zhao Quan, head of HNA's tourism division and the group's newest board member, told Reuters that adjustments in the group's portfolio have started but that the company was not selling its holdings "blindly."
While HNA's controlling stake may deter some investors Gategroup is poised to benefit from high investor demand in initial public offerings, they added.
Gategroup posted earnings before interest, tax, depreciation and amortization of 200.5 million Swiss francs in 2016.
In January, the company acquired 49.9 percent in peer Servair, after a string of other deals in 2016. ($1 = 0.9947 Swiss francs) (Reporting by Arno Schuetze; Editing by Andreas Cremer and Keith Weir)