The owners of one of China’s leading online vendors of seafood is seeking to offload a 25 percent stake in the company in order to pay down debt.
Suning’s parent company appears to have lined up several suitors, with Chinese business magazine Caixin reporting that a state investment holding body is likely to purchase the stake for an estimated USD 2.5 billion (EUR 2.1 billion). This would continue a trend of state-owned enterprises taking larger stakes in China’s seafood sector, including state-owned conglomerate Guoxin, which has taken stakes in several seafood firms.
China’s largest brick-and-mortar retailer, Suning Commerce Co. Ltd. wants to sell a USD 2.5 billion (EUR 2.07 billion) stake in Suning.com, its online retailing operation.
The company has struggled to service huge debt loads it built up through investments in Carrefour, in Chinese real estate developer Evergrande, and in Italian soccer club Inter Milan. It is one of numerous Chinese companies featuring in a debt-management problem that has engulfed China’s corporate sector in recent months.
Established in 1990, Suning became China’s largest vendor of electronics with stores across the country before seeking to expand into other businesses, including online sales of fresh foods.
The Suning.com story is emblematic of many large Chinese corporations, which went on a major debt-driven acquisition spree over the past decade. Evergrande, China’s largest developer (which is also often cited as the world’s most indebted property developer), is itself facing questions over its ability to pay down debt after it sought in recent months to reschedule repayments.
Suning.com and its Chinese outlets of Carrefour have been working to improve sales of high-margin imported seafood, while simultaneously encouraging seafood sustainability certification efforts. Last June, seafood importer and processor Shanghai Huamer Foods launched its Marine Stewardship council-certified “French Toothfish” packaged product through Suning and Carrefour, with marketing support from MSC.
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