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SCMP Reporter

The Chinese partner of Nextage - a giant Shanghai retail joint venture in which Yaohan group has a majority stake - yesterday said it wanted to raise its stake in the store should the ailing Japanese retailer decide to sell.

 An official of Shanghai No 1 Department Store, which holds 45 per cent of Nextage, said Yaohan had not officially said it would sell any of its 55 per cent stake.

 A Hong Kong press report quoted Yaohan president Kazuo Wada saying that it was being considered.

 'We have not received any official word on what it wants to do with its stake in Nextage,' the Shanghai No 1 Department Store official said.

 His comments came as Yaohan Hongkong Corp last week said its wholly owned subsidiary, Yaohan Department Store, had filed for bankruptcy.

 Yesterday, the No 1 Department Store official said the Hong Kong debacle would have no impact on the operations of Nextage, claimed to be Asia's biggest retail emporium.

 The Pudong store cost US$228 million and is the first Sino-foreign retail venture approved by the State Council in 1992.

 'We [Nextage] are a limited shareholding company and a separate legal entity, so what happens in Hong Kong will not affect us,' the No 1 Department Store said.

 If Yaohan wanted to sell its shareholding, No 1 Department Store would have the choice to decide if it wanted to take up the offer.

 'The equity arrangement in Nextage remains unchanged for the time being, but if Yaohan wants to sell out, we will have the first option to buy part or all of its stake,' the No 1 official said.

 No 1 said it wanted to raise its stake to 51 per cent, if Yaohan does decide to dispose of its shareholding.

 Yaohan's stake in Nextage is divided into two portions: 36 per cent is owned through Hong Kong-listed Yaohan International and 19 per cent through Yaohan Japan.

 When the massive department store opened in Pudong in December 1995, sceptics questioned the choice of the location, which is thought to be relatively inconvenient and not yet on Shanghai's metro route.

 Yesterday, the Chinese official claimed sales were doing well, predicting turnover for the year would hit 900 million yuan (about HK$835.20 million), up from 725 million yuan last year.



Yaohan partner ready to raise stake in Shanghai store