Suning Investor to Swap Shares in Chinese Retailer for USD500 Million of State Cash
Liao Shumin
DATE:  Jun 03 2021
/ SOURCE:  Yicai
Suning Investor to Swap Shares in Chinese Retailer for USD500 Million of State Cash Suning Investor to Swap Shares in Chinese Retailer for USD500 Million of State Cash

(Yicai Global) June 3 -- The third-largest shareholder in Suning.Com, a Chinese e-commerce platform operator in need of liquidity, will transfer equity in the firm to the official body that manages Jiangsu province’s state-owned enterprises in exchange for nearly CNY3.2 billion (USD500 million).

Suning Appliance Group will hand 520 million shares, representing a 5.59 percent stake, to Jiangsu New Retail Innovation Fund under the provincial State-owned Assets Supervision and Administration Commission, Nanjing-based Suning.Com said in a statement late yesterday. It will receive CNY6.12 (96 US cents) per share.

Under the agreement, Suning.Com Chairman Zhang Jindong will buy back the shares within 10 months for not less than CNY3.2 billion and the benchmark yield, and for not less than 90 percent of the closing price on the day before the buyback. Zhang pledged his own 1 billion shares of Suning.Com to secure the deal.

Jiangsu New Retail Innovation Fund was set up on May 28 with a registered capital of CNY3.5 billion. An equity investment vehicle, the Jiangsu government is its actual controller.

Suning Group’s stake in Suning.Com will drop from 183,100 shares, or 19.67 percent, to 131,100 shares, or 14.08 percent, on completion of the transfer. It will continue to be the third-largest shareholder in the e-commerce retail platform after Zhang and Alibaba’s Taobao.

Suning has been trying to secure liquidity support this year. On Feb. 28, Suning.Com said Zhang, who is also its actual controller, and other shareholders aimed to bring in two strategic investors, Shenzhen International Holdings and Kunpeng Capital, by transferring 23 percent to them for CNY14.8 billion (USD2.31 billion).

Suning.Com had CNY252.3 billion in operating income last year, down 6.3 percent year on year, with a net loss of almost CNY4.3 billion, while it made a net profit of around CNY9.8 billion in 2019.

The company turned to focus on its main retail business and accelerated the optimization and adjustment of loss-making businesses. It turned losses into profits in the first quarter this year, with around CNY54 billion in operating income, down 6.63 percent annually, and a net profit of CNY456 million (USD71.3 million).

Shares of Suning.Com [SHE: 002024] closed little changed today at CNY6.71 (USD1.05) each.

Editor: Peter Thomas

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