Suning Halts Trading as Debt-Ridden Chinese Retailer Braces for Major Power Shift
Zhang Yushuo
DATE:  Feb 25 2021
/ SOURCE:  Yicai
Suning Halts Trading as Debt-Ridden Chinese Retailer Braces for Major Power Shift Suning Halts Trading as Debt-Ridden Chinese Retailer Braces for Major Power Shift

(Yicai Global) Feb. 25 -- Trading in Suning.com’s stock was temporarily suspended today as its biggest shareholders prepare to sell up to a quarter of the Chinese retailing giant’s equity to unidentified buyers to resolve pressing liquidity issues, the company said today.

Chairman Zhang Jindong, majority shareholder with a 20.86 percent stake, and Suning Appliance Group, the third largest shareholder with 16.8 percent equity, are preparing to divest between 20 percent and 25 percent of the company’s stock to investors in the infrastructure sector, the Nanjing-based firm said.

The move, which is still pending approval from authorities, is likely to involve a major shift in power. Once finalized, the reshuffle will help optimize the company’s share structure and push forward its long-term strategies, it said.

Suning.com, which runs grocery and electronics stores, is mired in debt. The firm is expecting losses of up to CNY4 billion (USD612 million) in 2020, a widening of nearly two and a half times from 2019. Revenue for the year could reach CNY259.6 billion (USD40 billion), it said earlier.

Rumors broke in December last year that Suning.com’s capital chain was broken, that it was drowning in debt, much of which needed to be paid off in the near future. The company firmly rejected the accusations at the time and reported the matter to the police.

It also shot down other hearsay that state-owned enterprises in southeastern Jiangsu province were preparing to buy as much as 19.99 percent of the company’s shares for around CNY10 billion (USD1.6 billion).

Zhang, who is also founder and chairman of commercial giant Suning Holdings, his son Zhang Kangyang and another stakeholder Nanjing Runxian Enterprise Management Center pledged all their shares in the sister firm, worth CNY1 billion (USD153 million), last December to a unit of e-commerce giant Alibaba Group Holding as collateral for loans.

Editor: Kim Taylor

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Keywords:   Suning,Controlling Stake,Suning.Com