The Business Times

China's Suning shares jump after restructuring eases debt concerns

Published Tue, Jul 6, 2021 · 02:14 PM

[BEIJING] Shares in China's Suning.com jumped by a maximum 10 per cent on Tuesday after the loss-making online retailer announced a restructuring plan that will see a state-backed fund become a major shareholder, easing investors' liquidity concerns.

Suning.com's chairman and biggest shareholder, Zhang Jindong, along with several other major shareholders, will sell a combined 17 per cent stake to a local government-led fund that counts Alibaba Group and Xiaomi as investors, according to an exchange filing.

The 8.8 billion yuan (S$1.83 billion) deal, which the company said will leave it without a controlling shareholder, comes amid concerns over cash flow at Suning.com and its parent company, Suning Group.

Suning.com, which forecast a net loss of up to 3.2 billion yuan in the first half, needs to repay 15.8 billion worth of bonds this year.

The company's shares dropped to a decade low on June 15 when trading was halted pending announcement of a restructuring. The stock jumped the maximum 10 per cent after trading resumed on Tuesday.

Suning.com said on Tuesday that the new fund, led by the government of Jiangsu Province and the city of Nanjing, will actively support its stable and healthy development. It said the local governments will provide emergency credit support as necessary.

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Alibaba, which already owns roughly 20 per cent of Suning.com through its Taobao unit, is an investor in the fund, as are major electronics makers Haier, Midea, TCL and Xiaomi.

REUTERS

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