Chinese giant plotting House of Fraser swoop secures a war chest of £1.1 bn for takeovers
THE Chinese corporation behind a swoop on House of Fraser has lined up a £1.1 billion lending facility to support ‘business opportunities’ and takeovers.
Fullshare has confirmed the financing just days ahead of an expected update on talks that could see the Hong Kong-listed company and its business partners seize a majority stake in the famous department store chain. Leisure and property conglomerate Fullshare is controlled by tycoon Ji Changqun, who is worth an estimated £3.9 billion.
Fullshare said its ‘VIP’ agreement with Bank of Communications Co in China, known as BoCom Bank, will include the provision of ‘acquisition finance’ and provide ‘a strong back-up for the group in pursuing business opportunities’. Fullshare owns 45 per cent of Wuji Wenhua, the firm trying to buy a majority share in House of Fraser. Along with other Chinese investors, it has been in discussions for a month.
There has been growing speculation that a deal may include an injection of cash that would allow House of Fraser to restructure its debts and open more stores in Asia, where it currently has just two shops.
Fullshare’s investments include Wonder City, a giant shopping mall in Ji’s hometown Nanjing in Jiangsu Province; the Sheraton Grand Mirage Resort in Port Douglas, Australia; and a 28-storey building in Singapore’s Raffles Place.
BoCom is one of China’s top five commercial banks.
House of Fraser’s existing owner is a Chinese department store operator which owns 89 per cent of the business. It is in turn controlled by Chinese industrialist Yuan Yafei, whose wealth is estimated at £1.4 billion.
Sports Direct founder Mike Ashley, also owner of Newcastle FC, holds the remaining 11 per cent.
Meanwhile, it emerged last week that DIY store Homebase had been put up for sale by its Australian owners.
The company is also believed to be considering an arrangement to close unprofitable stores and cut debts.