Fosun International On Cusp Of New ‘Asset-Light’ Era With Latest Sale

Fosun International On Cusp Of New 'Asset-Light' Era With Latest Sale

Key Takeaways:

  • Fosun International’s total debt-to-capitalization ratio stood at 50.4% at the end of last year, down 2.9 percentage points from the previous year
  • The company recently announced the sale of most of its stake in Belgian insurer Ageas, and has raised 57.3 billion yuan from similar asset sales over the past two years

Li Shih Ta

After years of mining the globe for assets, conglomerate Fosun International Ltd. (OTC: FOSUF) has shifted into a new phase as it tries to find the right balance between its large stable of myriad businesses and a suitable level of debt. In the latest of its recent spree of asset sales to reduce that debt and focus on its core areas, the company announced last week it was selling 8.19% of its stake in Belgian insurer Ageas. 

“We used to prospect and mine the world,” said Fosun Chairman Guo Guangchang at his company’s annual results conference late last month. “But now we have enough good resources in areas where we have an advantage.”

Fosun International’s latest asset sale will see it sell the 8.19% in Ageas to a unit of French banking giant BNP Paribas for a total consideration of 626 million euros ($667 million) to 670 million euros. The transaction is expected to bring the company a pre-tax profit of 60 million euros to 65 million euros, and will still leave Fosun as a small shareholder in Ageas with a stake of just over 1%.

The deal marks Fosun’s second sale of a major financial asset this year, following its sale of 5.6% of Banco Comercial Português in January for 235 million euros. That sale still left Fosun with more than 20% of the bank’s shares. Reports emerged last month that it would also like to sell that remaining stake, which is worth about 840 million euros, though no deals have been announced.

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From Shopper To Slimmer

Fosun International has shifted from its former status as a “crazy shopper” to the current “slim-down” mode ever since being put on a watch list for a possible downgrade by …

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