Fosun retail unit Yuyuan sets up US$6.4 billion firm to invest in airlines
- Yuyuan’s shares rise by the daily limit amid speculation that its aviation investment company would target Hainan Airlines
- Retailer will contribute 10 billion yuan, while the rest of the capital will be provided by unnamed partners
The retailer said in a filing to the Shanghai Stock Exchange on Thursday that it would shell out up to 10 billion yuan to establish the business. The rest of the capital will be contributed by unnamed partners. The new entity will be called Yuyuan Aviation Industry Limited Partnership, according to the filing.
Yuyuan’s shares rose by the daily limit of 10 per cent to 13.08 yuan on Thursday amid speculation that its aviation investment company would target Hainan Airlines.
“The announcement fuelled expectations that Yuyuan, or its parent Fosun, would be interested in buying Hainan Airlines’ assets,” said Ivan Li, a fund manager at Shanghai-based Loyal Wealth Management. “But Hainan Airlines may not be able to boost Yuyuan’s earnings because it is unprofitable.”