China Conglomerate to List Club Med Unit for IPO

China Conglomerate to List Club Med Unit for IPO, seeking to raise up to USD548 million this month in Hong Kong. Fosun International (0656.HK), which bought Club Med in 2015 for 916 million Euros, is looking to raise up to USD 548 million with the IPO of its Club Med holiday business in Hong Kong, as it seeks funds to grow its business in China and overseas asset acquisition, the company said.

Fosun Tourism could raise up to $630 million if a greenshoe, or over-allotment option, is exercised within a month of the start of trading. Fosun International, which bought Club Med in 2015 for 939 million euros ($1.1 billion) after what was then France’s longest takeover saga lasting almost two years. Fosun reorganized its businesses in 2016, creating Fosun Tourism Group and paving the way for the latter’s listing plan.

Fosun International is seeking to raise up to 500 million from an initial public offering of shares in the tourism business it has built up around the Club Med resort chain. While the offering prospectus for Fosun Tourism Group shows it has been profitable at an operating level since 2016, Club Med has posted net losses since 2013 due to interest expenses, according to Neikkei Asia review.

Fosun Tourism on Thursday unveiled three cornerstone investors in the IPO. Macau tourism and property company Shun Tak Holdings has pledged to put in USD 34 million. Alibaba Group Holding is investing USD 5 million, it said.

Fosun Tourism set an expected IPO price range of HKD15.60 to HKD20 a share, which at the top end would result in proceeds of HKD 4.13 billion. Club Med, which was listed on Euronext Paris before the buyout, accounted for virtually all of Fosun Tourism's revenues and profits last year, but the company's operations include the new 11 billion yuan ($1.59 billion) Atlantis Sanya resort center on the Chinese holiday island of Hainan and various tourism services businesses.