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Embattled retailer Suning.com eyes private equity assets in turnaround bid as billionaire founder loses grip on group
- Suning.com will pay cash, issue new shares for acquisition that will dilute billionaire founder’s control of white-goods retailer
- Vendor Shenzhen Capital Group claims to be the most successful among mainland China’s private equity and venture capital firms
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Zhang Shidongin Shanghai
Suning.com, once China’s dominant retailer of home appliances, is planning to buy unspecified assets from a local private equity fund to revive the group, after forays in football clubs and other businesses drained cash.
The firm is holding talks to buy some companies from a fund backed by Shenzhen Capital Group, it said in an exchange filing on Wednesday, without disclosing the details. The purchase will be funded by issuing new shares and partly by cash, it added.
It is the latest move by billionaire founder Zhang Jindong to rescue the firm, as its core business cracked under pressure during the Covid-19 pandemic. Suning posted an annual loss last year, the first since its 2004 listing, as Alibaba Group Holding and JD.com dominated e-commerce sales.
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Shenzhen Capital Group is controlled by the city’s municipal government and had invested 61.7 billion yuan (US$9.5 billion) in 1,233 projects at the end of January, according to its website. It claimed to be the most successful among venture capital and private equity firms in mainland China in terms of investment exits and taking its investees to public markets.
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Shares of Suning have been suspended since June 16 pending further announcement on the deal. They last traded at 5.59 yuan in Shenzhen, the lowest in eight years. Its market value has dwindled to 52 billion yuan, a 75 per cent erosion from the peak in 2015.
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