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China's Gome Dives Despite Denial of Bankruptcy Filing
Xu Wei
DATE:  Dec 02 2022
/ SOURCE:  Yicai
China's Gome Dives Despite Denial of Bankruptcy Filing China's Gome Dives Despite Denial of Bankruptcy Filing

(Yicai Global) Dec. 2 -- Shares of Gome Retail Holdings, which strives to become more profitable than ever by 2025, slumped even though the struggling Chinese electrical appliance chain refuted a legal service provider's report of an alleged bankruptcy filing by disgruntled suppliers.

Gome [HKG: 0493], the listed arm of Gome Holdings, dived 14.1 percent to close at 17 Hong Kong cents (2 US cents), almost three-quarters down this year.

Gome Electrical Appliance or other units of Gome Holdings have not received any legal documents or inquiries from judicial authorities regarding a bankruptcy filing, the Beijing-based firm said in a statement on its Weibo yesterday.

The Case Center of Ten Billion of Industrial Institute wrote on its Weibo on Nov. 29 that suppliers of Gome have applied for liquidation of the retailer in Beijing as the firm owes millions of yuan to suppliers. The court has initiated a review, the legal service provider added. Established in December 2020, Beijing-based Case Center Ten Billion of Industrial Institute works on complex cases under the Ten Billion of Industrial Institute, a think tank. 

Gome will deal with its operational difficulties through negotiations under the premise of fully protecting the rights and interests of all parties, it said yesterday. The white goods retailer will follow legal provisions, and also asks the relevant parties to abide by laws and regulations to solve the problems, it added.

Founded in 1987, Gome Holdings has grown into a conglomerate of retail, finance, and real estate. But lately, it has been having trouble repaying its debts. This year, the firm's net loss is expected to expand between 35 percent and 55 percent from last year's CNY4.4 billion (USD626.4 million), according to a statement issued in October. As of Sept. 30, overdue loans tallied about CNY3 billion. Gome Holdings is actively discussing with relevant banks and financial institutions to revise the loan terms, it said. 

Major shareholders Huang Guangyu and his wife have sold a 24 percent stake in Gome this year, according to bourse data. Huang, who was earlier jailed for insider trading and graft, used to be China's richest man.

Editor: Emmi Laine, Xiao Yi

 

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Keywords:   Gome,Bankruptcy liquidation