(Yicai Global) March 22 -- Struggling Suning.com will place its warehousing and other logistics assets into a new joint venture with Singaporean warehousing giant Global Logistic Properties to help ease liquidity pressure, the Chinese retailer said yesterday.

GLP will inject CNY3.04 billion (USD466.9 million) into Zhuhai Puyi Logistics Industry Investment Partnership, equivalent to 80 percent of the investment capital, and Nanjing-based Suning.com the remaining 20 percent, it said.

The move will help integrate the resources of both parties and enable Suning.com to revitalize its stock assets and improve its industrial competitiveness and profitability, the company said.

Earlier this month two investment firms backed by the Shenzhen government stepped in to prop up the ailing retailer, which has racked up liabilities of CNY136.1 billion (USD21 billion), and bought a majority 23 percent stake for CNY14.8 billion (USD2.3 billion).

The Shenzhen Municipal State-owned Assets Supervision and Administration Commission is also a major backer of GLP, and the JV investment could have been arranged by the local government. Property developer Vanke Property, in which the Shenzhen SASAC is a major backer, holds 21.4 percent equity in GLP.

Suning.com has been loss making for seven consecutive years largely due to overaggressive expansion – the firm bought an 80 percent stake in hypermarket chain Carrefour China in September 2019 – and the fallout from the Covid-19 pandemic which greatly reduced footfall to its brick-and-mortar outlets. 2020 losses are expected to widen by two-and-a-half times from 2019 to CNY3.9 billion (USD604.4 million), the company said in an earnings report on Feb. 26.

Suning.com's stock price [SHE:002024] closed up 0.85 percent at CNY7.16 (USD1.10) today.

Editor: Kim Taylor