(Yicai Global) Sept. 5 -- Fosun International plans to reduce its stakes in Fosun Pharmaceutical and Jinhui Liquor. As part of a plan to raise more than CNY10 billion (USD1.4 billion), the debt-strapped Chinese conglomerate has been selling stakes in listed companies since the start of the year.

A statement released by Fosun Pharma on Sept. 2 did not specify any reason for the divestment and the Shanghai-based drugmaker did not respond to inquiries from Yicai Global.

Shanghai Fosun High Technology Group, an affiliate of Fosun International, plans to sell more than 80 million shares of Fosun Pharma, or 3 percent of the total share capital, through centralized bidding and block trading.

This is the first time Fosun International has reduced its interest in Fosun Pharma since the drugmaker was listed in Shanghai in 1998. But it will not affect Fosun International’s status as controlling shareholder.

Fosun Pharma’s shares [SHA:600196] fell by the 10 percent daily trading limit to close at CNY36.19 (USD5.22) each today, while its Hong Kong-listed stock [HKG:2196] finished down 13 lower at HKD21.85 (USD2.78).

The market is concerned about the debt situation at Fosun International, though the Shanghai-based company claims to be operating in a stable manner.

It had debt of CNY261.1 billion (USD37.7 billion) as of June 30, up from CNY237.1 billion at the end of last year, its latest earnings report showed. The company cited business expansion as the cause. Its debt-to-asset ratio reached 56.8 percent, 3 percentage points higher than at the end of 2021.

Fosun International has sold stakes in Hainan Mining, Tsingtao Brewery, and Zhongshan Public Utilities Group since the start of 2022. It also sold US insurer AmeriTrust in April.

Now it also plans to cut its equity holding in Jinhui Liquor. Fosun International affiliate Yuyuan Tourist Mart and an entity acting in concert with it plan to cut their stake in the ‘baijiu’ maker by nearly 66 million shares, accounting for 13 percent of the total share capital.

After the sale, Yatter Investment Group will be Jinhui Liquor’s majority shareholder. Yatter Investment is run by Li Ming, a wealthy businessman from Gansu province. In May 2020, Fosun International spent CNY1.8 billion (USD259.7 million) to buy the controlling stake in Jinhui Liquor from Li.

Jinhui Liquor’s shares [SHA:603919] closed up 2.4 percent today at CNY27.85 (USD4.02) a share.

Editor: Tom Litting