FOSUN SELLS AGEAS STAKE TO CUT DEBT
BNP Paribas buys 8.2% shareholding in Belgian insurer from mainland conglomerate for €670m
Fosun International, one of China’s largest private-sector conglomerates, has agreed to sell an 8.2 per cent stake in Belgian insurer Ageas to BNP Paribas for about ¤670 million (HK$5.5 billion) as part of an effort to reduce its debt amid economic turbulence.
A deal involving the sale of 15.4 million shares of Ageas was concluded last Friday, the Shanghaibased group said in a filing to the Hong Kong stock exchange.
“The disposal is part of the company’s efforts [towards] streamlining its portfolio and implementing a core businessfocused strategy,” Fosun said in the filing published on Sunday. “It also demonstrates the group’s continuous determination to improve its financial performance and create maximum value for its shareholders.”
Fosun, controlled by billionaire Guo Guangchang, would still hold 1.95 million shares, or 1 per cent, of the Belgian insurer after the transaction, the company added.
The divestment came just two weeks after Fosun pledged to hasten its exit from non-core businesses while focusing on assets that generate cash flow to improve its profitability.
The conglomerate, which is involved in a wide range of industries including tourism, pharmaceuticals, real estate, and financial services, aimed to cut its debts by 10 billion yuan (HK$10.8 billion) annually in the next two to three years, co-chairman Wang Qunbin said during an earnings briefing on March 28.
Fosun reduced its interestbearing debts, such as bank loans and corporate bonds, by 15 billion to 211.9 billion yuan last year, the company said.
“More divestment deals will surface after Fosun’s sale of the European insurer’s stake,” said Ding Haifeng, a consultant at Shanghai-based financial advisory firm Integrity. “The market expects Fosun to sell down stakes in some of its tourism assets as it pursues an asset-light strategy.”
Fosun Tourism Group, Fosun International’s leisure and tourism unit, is courting both domestic and international investors. The group, which owns popular resort chain operator Club Med, announced in mid-March it was open to strategic investment as it embarked on the asset-light strategy.
Investors who “share the same values and agree upon the company’s strategy” were welcome to acquire stakes in all units, Fosun Tourism chairman Xu Xiaoliang said during a media briefing last Friday.
China’s economy expanded by 5.2 per cent last year, the slowest annual rate since 1990, excluding the pandemic years. The World Bank has projected the country’s gross domestic product growth will slow to 4.5 per cent in 2024 and 4.3 per cent in 2025.
Fosun International posted a net profit of 1.38 billion yuan for 2023, turning around from a net loss of 831.8 million yuan a year earlier. Revenue grew by 8.6 per cent to 198.2 billion yuan.
Ageas and BNP Paribas are long-time partners in AG Insurance in Belgium. Ageas owns 75 per cent of the venture and BNP holds the remaining 25 per cent.