The conglomerate, indebted up to 37.4 billion euros, is in the viewfinder of the Chinese banking regulator.
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The owner of Club Med is in turmoil. Fosun, one of the main Chinese conglomerates, which has dozens of companies in real estate, finance, tourism, or in the pharmacy, is the subject of a warning of its national banking regulator. According to the Bloomberg agency, Chinese financial institutions have received a call to examine their exposure to the Chinese group, indebted to the tune of 260 billion yuan (37.4 billion euros).
After the publication of Bloomberg’s information on Tuesday, September 13, the Fosun action plummeted 9.6 % on the Hong Kong Stock Exchange, Wednesday, September 14, to reach its lowest level since 2012, before resuming 4 % Thursday September 15. Mined by the repeated defects of real estate developers like Evergrande, the confidence of investors in large Chinese groups is at the lowest this year. But the case of Fosun reveals a risk of contagion to other sectors.
The group leader, Guo Guangchang, promised to prosecute Bloomberg in court: “These false information from Bloomberg News have seriously affected Fosun,” he said in a statement published on the Weibo social network. The company also minimizes the accusations, presenting the recommendations of the regulator as “of the collection of routine information”.
all -round acquisitions, then transfers
But, for investors, doubts about the conglomerate health were fueled by the sale of group participation in a pharmaceutical company on September 2. Since this announcement, the Fosun course has lost 18 %. Fosun justifies his sales of assets by a desire to focus on his favorite sectors. However, the pharmacy is precisely one of the group’s activity hearts. The Fosun Pharma branch, for example, distributed the Biontech vaccine in Hong Kong and Macao. The sale is more like a desperate maneuver to raise cash than to refocus, on the part of a company which, according to Moody’s, must reimburse 45 % of its debts by March 2023.
Fosun has the air of the last survivor of a bygone era. Created in 1992 by Guo Guangchang, the group had grown from 2010, multiplying all -round acquisitions: in a few years, the group had bought Club Med, the English football club Wolverhampton Wanderers, or the largest Portuguese bank, millennium bcp.
To the point of attracting the wrath of the authorities, worried about the financial risks taken by these Chinese giants fond of acquisitions, such as the promoter Wanda, the insurer Anbang, or Hna, another conglomerate present in dozens of sectors . These last three have all been dismantled, partially or completely. But, among these groups described as “gray rhinoceros” (obvious risks, but difficult to contain) by the Chinese state media, Fosun was a relatively good student, with solid finances.
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