China’s biggest banks and state-owned companies have been told to check their financial exposure to Fosun, the sprawling conglomerate which owns assets including Premier League soccer club Wolverhampton Wanderers, as the heavily indebted group battles the impact of the property slowdown. sector in its home market.
The financial strength of the Shanghai-based group, co-founded in 1992 by the billionaire Guo Guangchang and built in one of China’s largest non-public conglomerates, has come under scrutiny after a huge real estate bond sale that began in June.
Dollar bonds backed by Hong Kong-listed Fosun International, the group’s main company, fell, sending its shares to levels not seen in nearly a decade.
On Tuesday, it emerged that regulators, including China’s banking watchdog and the local commission that oversees state investments, have asked the institutions they oversee to review the financial risks associated with the exposure. in Fosun.
Ratings agency Moody’s last month downgraded Fosun International with an outlook on all ratings changed to negative, reflecting ‘rollover uncertainties’ over its $40bn (£34bn) debt and risks related to any sale of assets to raise funds in more difficult economic conditions.
A spokesman for Fosun, which has a global portfolio of investments including Portugal’s biggest bank and French fashion house Lanvin, said it had not received any notification from authorities about the financial exposure claims. , according to Bloomberg.
The spokesperson then contacted the Beijing Public Assets Supervision and Administration Commission of the State Council (SASAC) and was told that the practice was part of his “normal research” and had previously involved other businesses, adding that Fosun’s operations remained “healthy and resilient.”
While the company remains under intense pressure in China, the world’s second largest market, Fosun said many of its international businesses have recovered from the pandemic.
Its subsidiary Fosun Tourism, which owns brands such as Thomas Cook, Club Med and Atlantis, said in the first half of this year revenue was up 130% compared to the same period last year.
Fosun Tourism said it “maintains a sound and healthy financial position”, adding that reservations at Club Med have reached 90% of pre-pandemic levels.