HNA Group has asked the Hainan provincial government to lead a task force to resolve its liquidity risks, according to the company's official website on Saturday.

The liquidity risks, which erupted at the end of 2017, can't be thoroughly resolved and are increasing due to the coronavirus outbreak, the company said on its website.

The task force is led by Gu Gang, chairman of Hainan Development Holdings Co., an investment arm of the government of the southern province, with officials from the Hainan Yangpu Economic Development Zone, the Civil Aviation Administration of China's Central and Southern Regional Administration and China Development Bank.

Before, an executive of the company denied the rumor that the Chinese government planned to take over conglomerate HNA Group Co. and sell off its airline assets, replying to China Business that he has never learned about any information about the takeover, split or reorganization.

HNA Group directly controls or holds stakes in a number of local carriers, including its flagship Hainan Airlines.

A local media report released earlier that the government of Hainan, the southern province where HNA Group is based, is in talks to take control of the group.

In December, the firm had delayed some salary payments due to cash flow shortage, but its chairman Chen Feng vowed to resolve liquidity risks in 2020.

At present, HNA Group's overall plan for mitigating liquidity risks focuses on the main aviation industry and disposing of assets in exchange for liquidity.

It is reported that the huge liquidity crisis appeared since the second half of 2017. HNA Group disposed of 300 billion yuan (42.74 billion U.S. dollars) of assets in 2018 alone, mainly focusing on non-aeronautical assets and businesses such as finance and real estate.

HNA Group's total asset size stood at about one trillion yuan as of 2019. Chen plans to reduce the group's debt ratio to less than 70 percent by the end of 2020, with total assets not exceeding 700 billion yuan.

China's airline industry has been hit hard by the novel coronavirus outbreak, which caused airlines to cancel thousands of flights. Civil Aviation Administration of China is working on financial relief policy for airline companies, helping them reduce cost burden amid the epidemic.