Advertisement
Fosun International sells assets amid credit rating cuts and liquidity concerns
- Recent exchange filings show several stake sales that have helped raise about US$100 million in cash
- Moody’s and S&P have downgraded Fosun’s creditworthiness this quarter amid looming debt maturity and liquidity challenges
Reading Time:2 minutes
Why you can trust SCMP
Fosun International, which owns the Club Med chain of resorts, has sold some of its peripheral assets to raise almost US$100 million in cash in recent weeks, as credit rating cuts heighten concerns about the conglomerate’s financial strength.
Advertisement
The group sold 38 million shares in Shanghai-listed retailer Shanghai Yuyuan Tourist Mart for 295.8 million yuan (US$42 million) in several transactions between August 26 and September 19, according to Shanghai Stock Exchange filings on Tuesday.
It also sold 26.1 million shares in New China Life Insurance for about 400 million yuan on September 15, trimming its ownership to 4.8 per cent and below the 5 per cent substantial shareholder threshold for the first time since 2016, a separate filing showed.
The sales, while small relative to the size of the group, followed recent reductions in its holdings in its flagship pharmaceutical and tourism units. They might do little to temper speculation about its finances. Fosun International last week denied a Bloomberg News report that Chinese regulators were asking banks to monitor its debt burden.
Credit rating companies earlier this quarter downgraded Fosun International’s creditworthiness deeper into junk territory as a large amount of debt matured while its funding avenues narrowed. Moody’s Investors Service cut its rating by one notch to B1 on August 23 citing concerns about its liquidity. S&P Global Ratings lowered its rating a step to BB- on September 16 based on a similar argument.
Advertisement
Advertisement