Fosun considering options for more assets in China and overseas, sources say

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(Bloomberg) — Fosun International Ltd. is exploring options for multiple assets in China and overseas as the conglomerate seeks to raise capital to repay debt, according to people familiar with the matter.

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The Shanghai-based company has told advisers that its domestic food and beverage business, including noodle chain Songhelou, is available to potential investors or buyers, the sources said. Fosun is also considering strategic options for its investment in electric vehicle battery maker JEVE, the sources said. JEVE was valued at 10 billion yuan ($1.4 billion) last year in its last funding round, one of the people said.

In the real estate sector, Fosun explored a potential transaction involving the Bund Finance Center, a landmark commercial building in Shanghai, the sources said. A sale could fetch up to billions of dollars, although investors have shown mixed interest so far, the sources said.

Beyond China, Fosun is weighing options for Silver Cross, a British maker of baby strollers and furniture it acquired in 2015, the sources said. Bloomberg News reported last month that the conglomerate was reviewing its holdings in financial institutions in Europe, including German lender Hauck & Aufhäuser Lampe Privatbank AG. A Fosun representative said at the time that the group currently had no plans to sell.

Fosun is also considering strategic options for French luxury resort chain Club Med SAS and could seek a value of around $1.5 billion for the company in a transaction, Bloomberg News reported. It owns the resorts through its listed leisure arm Fosun Tourism Group.

Shares of Fosun International fell 3.1% in Hong Kong on Tuesday. The stock is down about 32% this year, valuing the company at around $6 billion.

Deliberations are at an early stage and Fosun has not officially selected any advisers or made a final decision, the sources said.

Fosun will continue to adhere to its thorough industrial operations and industrial investment strategy, focus its core business around family consumption needs, intensify its innovation efforts, and pursue its globalization strategy to provide good products and services to families around the world. , said a company representative in response to a query from Bloomberg News.

For specific project information, please refer to company announcements, the representative added.

Fosun told analysts in October that it aims to sell up to $11 billion in assets over the next 12 months. Recently, he agreed to divest a stake in parent company Nanjing Iron & Steel Co. for 15 billion yuan as well as divest a HK$4.4 billion ($561 million) stake in Zhaojin Mining Industry Co. .

Last month, Moody’s Investors Service downgraded Fosun further into junk territory, citing low liquidity at the holding company level, which is “insufficient to cover” debt maturing over the next 12 months. Moody’s latest ratings were unsolicited and Fosun said it ended its business cooperation with the credit assessor and stopped providing relevant information to Moody’s.

Fosun’s Shanghai Yuyuan Tourist Mart Group Co. unit acquired Songhelou in 2018. The Suzhou-style noodle chain had more than 90 stores across China by the end of June, according to Fosun’s latest interim report. Shanghai Fosun High Technology Group Co. invested in Tianjin-based battery maker JEVE in 2018. JEVE supplies Chinese automakers including Great Wall Motor Co. and Chery Automobile Co.

–With the help of Shirley Zhao.

(Updates with actions of Fosun International in sixth paragraph.)

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