Moody’s lowers Fosun International’s rating to “negative”.
Published on 26.10.2022
Moody’s downgrades rating from Fosun International to “negative” According to Reuters, the global rating agency Moody’s lowered the rating of Fosun International by one notch on Tuesday October 25 and revised its forecast from “under review” to “negative” after the company disposed of significant assets to ease cash and debt burdens.
Fosun announced last week that its subsidiary would sell its 60% stake in Nanjing Nangang United for up to 16 billion yuan. Previously, the major Chinese conglomerate and its subsidiaries reduced their stakes in companies such as Xinhua Life Insurance and Shanghai Yuyuan Travel Mall.
As a result, the international rating downgraded Fosun’s rating from B1 to B2. Moody’s said in a statement that the “substantial” decline in the market value of Fosun’s listed assets had weakened its fundraising space.
He added that the market value of Fosun’s major holdings would have fallen by about 30% between the end of June and October 20 due to stock dilution and falling stock prices, Moody’s said, “Given Given the current low market expectations, Fosun is expected to encounter difficulties in refinancing its substantial short-term debt in the onshore and offshore public bond markets. »
Fosun does not have sufficient liquidity at the holding company level to cover its short-term debt maturing in the next 12 months. Fosun management plans to sell off non-core assets worth between 50 billion and 80 billion yuan over the next 12 months, including a non-controlling stake in Alibaba-backed logistics platform Cainiao, the Jianlong resource metals and real estate assets, Citigroup said in a report released Tuesday, Oct. 25.
Fosun’s management also plans to gradually repay outstanding senior notes and increase bank borrowings, the report said.