HNA Group scrapped its planned listing of Swiss-based airline caterer Gategroup at the 11th hour on Monday, dealing a blow to the cash-strapped Chinese conglomerate's efforts to reduce its debt mountain.

Gategroup, which announced in a statement that the IPO had been canceled, had been due to start trading in Switzerland on Tuesday, with the IPO valuing the whole company at as much as US$2.8 billion.

A source close to the IPO process said HNA abandoned the listing because it had a clear idea of Gategroup's value and was concerned it might not be reached.

HNA expected to raise as much as 1.29 billion Swiss francs (US$1.4 billion) from selling a stake of up to 65 percent in Gategroup - funds needed as the Chinese company battles a liquidity crunch following US$50 billion in acquisitions.

A sale of new shares could have raised another 350 million francs for Gategroup.

The sale was HNA's latest drive to restructure its operations while raising cash by selling equity and real estate assets.

The Chinese aviation-to-financial services group plans to float its Swissport ground services and cargo handling business later this year, and is also offloading more than US$6 billion in prime real estate in Australia, New York and Hong Kong.

Bookbuilding in the Gategroup IPO began this month, with a price range set at 16 to 21 Swiss francs per share. This would have implied a total market capitalization of about 2.1 billion to 2.6 billion Swiss francs (US$2.8 billion).

Gategroup said the listing on the SIX Swiss Exchange had been scrapped "due to a gap in valuation under current market conditions".

If the price range had been slightly lower, there would have been enough demand, the source close to the IPO process said.

"The view of many investors that HNA had to do the flotation at any price was wrong," the source said.

Demand from private banking clients was weaker than anticipated and investors had become more cautious, the person said while not ruling out another attempt to float the unit in future.

HNA has also been selling shares in Deutsche Bank, Park Hotels & Resorts, and Hilton Grand Vacations Inc as part of its campaign to raise cash.

Its plans to float Swissport could be easier, the source said, because Swissport's business model was less sensitive to economic swings than Gategroup's.

Traders said there had been some scepticism about the proposed listing, and displeasure among some potential investors at HNA's decision to sell the company it only bought in 2016.

"Investors are reluctant to take part and certainly not at the top end of the price range," a Zurich-based trader had told Reuters on Friday.

"We don't believe the company is worth more than 1.9 billion to 2 billion (francs), and not as much as 2.6 billion. There's also a certain China discount as well."

A spokeswoman for Gategroup declined to comment on interest from potential investors or whether the planned initial public offering could be restarted.