Fosun’s global holdings help spread risk from Thomas Cook collapse

Fosun Tourism and Fidelidade, two of the conglomerate’s major subsidiaries, together held 18.6 per cent of Thomas Cook shares

Conglomerate has not made any investment in relation to possible recapitalisation of Thomas Cook

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Fosun did not disclose its impairment losses from its Thomas Cook investment. Photo: AFP

Published: 12:00am, 28 Sep 2019Updated: 4:47am, 28 Sep 2019

The liquidation of 178-year-old British tour operator Thomas Cook will have a limited financial impact on Chinese conglomerate Fosun International, the Hong Kong-listed company said on Friday.

Fosun Tourism and Fidelidade, two of the conglomerate’s major subsidiaries, together held 18.6 per cent of Thomas Cook’s shares as of the end of June, making Fosun its largest shareholder.

Fosun said the carrying amount, which means the recorded costs, after its accumulated impairment losses from its investment in Thomas Cook amounted to just 327 million yuan (US$45.8 million), according to a filing with the Hong Kong stock exchange.

International rating agency Moody’s Investors Service agreed that the liquidation’s impact on Fosun would be limited, but added that it reflected the risks of the Chinese conglomerate’s overseas investment strategy.

Thomas Cook logos are pictured on the tail fins of the company's passenger aircraft at Manchester Airport in northern England on September 23. Photo: AFP

“The liquidation will have a limited impact on Fosun’s future cash flow and market value-based leverage because it has a large and highly diversified investment portfolio, which amounted to about 229 billion yuan as of the end of 2018,” Moody’s said.