A consortium led by the Jiangsu government is taking a stake in Suning.com, the retail arm of billionaire Zhang Jindong’s Suning Group, marking the latest move in China’s effort to bail out its heavily indebted conglomerates, reported the South China Morning Post.
Suning.com announced on Monday night that Zhang, Suning Group and Suning Appliance Group will sell 1.58 billion shares of the embattled retail firm, or 16.96% of the company, to a fund at RMB 5.59 per share ($0.86), according to company filings to the Shenzhen Stock Exchange. That puts the total value of the deal at about $1.4 billion.
Investors in the fund include the Nanjing municipal government, e-commerce giant Alibaba Group, home appliance makers Haier Group and Midea Group, electronics company TCL Technology and Chinese smartphone maker Xiaomi.
“This deal helps Suning out of its debt crisis,” said Maggie Hu, assistant professor of real estate and finance at the Chinese University of Hong Kong. “It contributes positively to the normal operation of business and avoids potential disruption due to bankruptcy risk.”