Chinese conglomerate Fosun’s tourism unit says it is ‘financially sound’ amid reports of Atlantis Sanya stake sale

Fosun Tourism is ‘operating well and it is financially sound’, company tells the Post
With total debt worth 220.9 billion yuan as of the end of June last year, Fosun International has been making plans to sell assets in recent months

China property

Yuke Xiein BeijingandYulu Aoin Hong Kong

Published: 8:16pm, 6 Mar 2024

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Fosun Tourism Group, the leisure and tourism unit of Chinese conglomerate Fosun International, said on Wednesday that it is “financially sound”, amid reports that its parent firm is mulling the sale of a stake in the luxury Atlantis Sanya resort to cope with debt.

Fosun International has been in talks with potential buyers – including state-backed companies and investors from the Middle East – over the sale of a part or all of its stake in the resort on Hainan, an island province in southern China known for its tropical climate and sandy beaches, Reuters reported on Tuesday. The value of a potential stake sale is unclear, the report said.

“Fosun Tourism is always reviewing and optimising its business portfolio, focusing on the growth of its core businesses and strengthening its operational capabilities,” Fosun Tourism said in a written response to the Post.

“Currently, [Fosun Tourism] is operating well, and it is financially sound.”

Fosun International, whose businesses include tourism, real estate and financial services, had recorded a total revenue of 97.1 billion yuan (US$13.48 billion) for the six months to the end of June last year. Its “happiness” segment, covering brands, tourism and leisure, accounted for more than 44 per cent of total revenue, according to the group’s interim report.

With 220.9 billion yuan of total debt as of the end of June last year, Fosun International has been making plans to sell assets in recent months.

Fosun Tourism’s Club Med to build resorts in Hainan as Chinese tourists return

In January, the company proposed the sale of a 5.6 per cent stake in Portuguese lender Banco Commercial Portugues to bolster its working capital. It was reportedly in talks in February to sell a minority stake in Club Med, another luxury resort operator, with a targeted valuation of US$800 million for the whole business. Meanwhile, Fosun International is also currently mulling the sale of its minority stake in Ageas, Belgium’s largest insurer.

According to Fosun International’s interim report, as of the end of June last year, its ratio of total debt to total capital decreased to under 52 per cent from 53 per cent as of the end of 2022.

The conglomerate said that during the six months ended on June 30 last year, it redeemed onshore bonds worth 6.73 billion yuan, as well as offshore debt of more than US$2.7 billion. The company also said that as of the end of June last year, it had no material offshore bonds due within one year.

Fosun International to sell stakes in four companies for US$975 million

S&P Global lifted the company’s rating outlook to “stable” and said in a report last May that Fosun International could reduce its debt burden through asset sales and support from domestic banks.

With a total floor area of 540,000 square metres, Atlantis Sanya has 1,314 hotel rooms and offers entertainment facilities that include aquariums, restaurants and shopping malls, according to its website.

Fosun Tourism is listed in Hong Kong and had a market value of HK$5.38 billion (US$687.7 million) as of Wednesday.

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