MILAN, Nov 16 (Class Editori) — Club Med calls rumors of a possible divestment by Fosun “irrelevant”. The Chinese giant has decided to focus on its family-oriented business and strengthen its financial structure by divesting 7 billion euros to 11 billion euros of non-core assets, a note explained.
In this process, the Group considers the pharmaceutical, retail and tourism sectors, as well as the insurance sector, its core assets. Fosun thus intends to remain a strong player in tourism with Fosun Tourism Group and its investment in Club Med remains a key part.
According to rumors relayed by the Acuris Intelligence Service, the giant controlled by Chinese billionaire Guo Guangchang, Fosun, is reportedly considering enhancement options for its subsidiary, which it acquired seven years ago.
Last September, according to reports by Bloomberg at the time, several regulators, including China's banking regulator and the local commission overseeing state investment in Beijing, had asked institutions under their supervision to closely examine the exposure to Fosun.
It appears that the Group is preparing to divest assets in order to repay debts having on hand, as of last June, 117.7 billion yuan in cash held by parent company Fosun International against liabilities of 651 billion yuan (92.5 billion dollars), 40% of which is subject to interest payments. Dollar bonds longer-term issued by the Group trade below 70 cents, a level that indicates stress.
(Source:Class Editori)
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