Fosun’s Club Med unit says it has filed for a Hong Kong IPO, could raise up to US$1 billion

PUBLISHED : Tuesday, 04 September, 2018, 5:06pm
UPDATED : Tuesday, 04 September, 2018, 7:12pm

Chinese conglomerate Fosun International has filed to spin off its tourism and hotels unit, which owns the French holiday resort chain Club Med, into a separate listing in Hong Kong that could raise up to US$1 billion, according to a source familiar with the matter.

Fosun Tourism Group is the largest leisure tourism resorts group in the world by revenue. Hong Kong-listed Fosun International, one of China’s largest buyers of overseas assets, received approval on July 4 from the Hong Kong stock exchange to proceed with the proposed spin-off. The company and its chairman, Guo Guangchang, together own 99.04 per cent of the tourism subsidiary.

Fosun Tourism operates Club Med resorts and operates hotels such as Atlantis Sanya. Through Miniversity, it operates learning and playing clubs for children, and its unit Fanxiu develops cultural and entertainment events.

J.P. Morgan, CLSA and Citi are joint sponsors for the listing, according to a filing document uploaded on Monday evening to the Hong Kong stock exchange website.

The company will use the funds raised from the listing to expand its global network of resorts, as well as invest in or acquire more companies, according to the document.

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The unit has yet to post a profit, but its losses have been narrowing for the past three years thanks to rising tourism spending in China and the rest of the world. The company’s net loss narrowed to 295 million yuan (US$43 million) in 2017, down from 473 million yuan in 2016 and 954 million yuan in 2015. Revenue stood at 11.8 billion yuan in 2017, up from 10.8 billion yuan in 2016 and 8.9 billion yuan in 2015.

Fosun Tourism generated more than 99 per cent of its revenue last year from the resorts it operates through Club Med.

Fosun International acquired the Paris-headquartered luxury holiday group in 2015 for 939 million euros (US$1.1 billion), after a two-year takeover battle with Italian tycoon Andrea Bonomi.

Club Med operates in more than 40 countries with 42 resorts in Europe and the Middle East, 15 in Asia-Pacific and 12 in the Americas.

The resort expanded into China in 2016 and has since opened six locations from Sanya in the southern island of Hainan to Yabuli in the northeastern province of Heilongjiang.

Fosun has also developed Atlantis Sanya, an entertainment resort that combines hotels with an aquarium, a water park, shops and restaurants.

It has also started design work on resorts in Lijiang, Yunnan province in southwestern China and Taichang, Jiangsu province.