Suning.com, the Suning Group’s home appliances and retail business unit, said it received 14.8 billion yuan ($ 2.3 billion) in investment from government-backed investors for a 23 percent stake to help ease its short-term debt burden to reduce.
The chairman of the Suning Group, Zhang Jindong, the majority shareholder and actual controller of the company, will reduce the shareholding and voting rights with a total of 21.8 percent of the shares together with the Suning Holding Group and the Suning Electric Appliance Group after the transaction is complete.
TTCO Trust Cooperation will also transfer around 3.07 percent of the shares to the new shareholders.
Shenzhen’s state-backed Shenzhen International Holdings and Kunpeng Capital would jointly hold 23 percent of the shares.
Suning has made a number of high profile acquisitions in recent years, including Japanese retailer Laox, Italian soccer club Inter Milan and the Chinese unit of French retailer Carrefour.
Suning.com shares will resume trading after the market opens on Monday after requesting the suspension of trading on Thursday last week.
“Investing government-backed assets in Suning.com fully recognized our strategic model and investment value to enable us to better focus on our core retail business,” the company said in a statement.
This would be beneficial to the company’s ongoing efforts to improve operational efficiency and profitability, it added.
It will set up a south China headquarters in Shenzhen to improve business capability and take full advantage of local resources.
The pandemic has hit the retail business hard as Suning.com reported a 4 percent decline in operating income and a net loss of 3.9 billion yuan for the full year, compared to a profit of 9.8 billion yuan last year.
The new shareholders will partner with Suning along with other state-owned subsidiaries in Shenzhen in areas such as supply chain, e-commerce, technology, logistics and tax-free business.
The Suning Appliance Group, which was one of the majority shareholders of Suning.com and held 16.8 percent of the shares prior to the capital transfer, also announced on Sunday that the Chinese Super League (CSL) champions Jiangsu FC had broken down for financial reasons before the 2021 season.