Fosun Group

Fosun Group sells 2b yuan worth of short term notes

PUBLISHED : Tuesday, 18 July, 2017, 3:54pm
UPDATED : Tuesday, 18 July, 2017, 3:57pm

Fosun Group, one of China’s biggest buyers of global assets, said it has issued 2 billion yuan (US$295.96 million) in short-term commercial paper, raising needed funds as China’s lenders close the taps on new loans amid heightened scrutiny of financial risks among mainland companies.

Shanghai Fosun High-Technology (Group) a wholly owned subsidiary of Fosun International announced on July 18 that it has issued 2 billion yuan worth of AAA-rated short term notes on the domestic inter-bank bond market. The issue was 2 times oversubscribed.

This is the company’s second issuance in 2017, with a tenor of 270 days.

The conglomerate, founded and chaired by Guo Guangchang, said the issue received strong support from China’s lenders.

“Interest from Chinese banks was particularly strong, who accounted for 85.5 per cent of the final subscription. The commercial paper priced with a coupon rate of 4.80 per cent,” Fosun said in the announcement released on Tuesday.

The announcement came as mainland media Jiemain reported China Construction Bank halted the sale of a Sunac product and called off a 1.5 billion yuan trust loan to the company after receiving a notice asking banks to review credit risks related to the company.

Other companies such as Fosun Group, HNA Group and Wanda were also named in the report.

Shares of Fosun International dropped 1.7 per cent to HK$11.68 in mid-afternoon trade on Tuesday, and its flagship drugmaker Shanghai Fosun Pharmaceutical Group fell 0.4 per cent to HK$28.75.

Fosun intends to use the entire proceeds to repay existing debt and will therefore not increase its total leverage.