(Yicai Global) Nov. 14 -- Struggling Chinese retailer Suning.com, which bought an 80 percent stake in Carrefour’s China business in June 2019, is now at loggerheads with the French hypermarket chain over the purchase of the remaining 20 percent, although the exact nature of the dispute is not known.

Market conditions have changed greatly since Suning’s subsidiary Suning International Group acquired the stake in Carrefour China, and the two parties are resolving their disagreement according to pre-agreed conflict resolution terms, Nanjing-based Suning said on Nov. 11.

Neither company has responded yet to Yicai Global’s queries about the reasons for the dispute.

After Suning bought the majority stake in Carrefour China, it was agreed that the company would not refuse to buy the remaining equity should Carrefour agree to sell it to Suning within a 90-day period starting two years after the acquisition date. And Suning would also be given the chance to make an offer in the 90-day period after the first 90-day period expired that Carrefour would not turn down.

On April 28, Suning reached a purchase agreement with Essonne-based Carrefour for the remaining 20 percent stake. Unit Suning International had paid CNY204 million (USD28.7 million) as of Nov. 10 and parent firm Suning is backing the deal.

Carrefour has started to ramp up its investment and business development in China recently. It penned deals worth CNY270 million (USD38.1 million) at the China International Import Expo that ended last week, a record high for the company. It is also participating in a large retail buyer alliance’s centralized purchasing group in Shanghai and has inked CNY18 million in procurement orders so far.

Suning, though, is hemorrhaging cash. The troubled retailer, which was part of a CNY8.8 billion (USD1.2 billion) government-led bailout last July, racked up losses of CNY4.5 billion (USD621 million) in the first three quarters, although this was a narrowing of 40 percent from a year earlier, according to it latest earnings report. It logged revenue of CNY55.5 billion over the period.

Suning’s financial crisis is largely due to overaggressive expansion, which includes the 80 percent stake in Carrefour China that set it back CNY4.8 billion (USD675.3 million), and the fallout from the Covid-19 pandemic which greatly reduced footfall at its brick-and-mortar outlets.

Suning’s share price [SHE: 002024] was trading flat at CNY2.04 (USD0.29) as of 12 noon China time today.

Editor: Kim Taylor