Chinese conglomerate Fosun International Ltd will completely exit its stake in four separate firms for a combined $974.74 million to prop up its general working capital, the debt-laden company said on Thursday.
Fosun held 25.7% in Tianjin Jianlong Iron & Steel Industrial and 26.7% each in Beijing Northern Jianlong Industrial, Jianlong Steel Holdings and Janeboat Holdings, the company said.
Fosun, which owns resorts brand Club Med among other assets, is among a handful of Chinese conglomerates which had rapidly expanded their business empires at home and overseas in the past decade mainly via debt-fuelled acquisition of assets ranging from luxury hotels and retail brands to soccer clubs.
But as the Chinese economy and their businesses slowed in recent years, the cost of servicing those debts jumped sharply, forcing them to explore the sale of some of those assets to bolster the balance sheets.
The share sale “will enable the group to focus more resources on key development strategies and key projects…,” Fosun said in a filing.
In the last few months, Fosun and its units have cut stakes in firms such as New China Life Insurance, Zhaojin Mining Industry Co and Shanghai Yuyuan Tourist Mart Group.
Reuters reported in November that the company is seeking to offload a minority stake in Alibaba Group’s logistics arm Cainiao, in a deal that could fetch up to $1 billion.
Reuters