Summary
Chinese conglomerate Fosun is considering putting its Atlantis Sanya resort up for sale. Located in the Sanya city on China’s Hawaii, Hainan Island, the resort accommodates over 1,300 rooms with luxury features such as views of marine life. Potential buyers could be from China or wealthy investors from the Middle East. Fosun’s intended sale signals its retraction from the tourism sector. The company, which holds a portfolio in healthcare, financial services, and property, could be restructuring its assets to manage its substantial debt.
Atlantis Sanya:
The Atlantis Sanya resort, nestled on Hainan Island – China’s version of Hawaii, spans an area comparable to 66 soccer pitches. It boasts of a hotel housing more than 1,300 guest rooms, some offering underwater marine life views. Additionally, the resort features a water park, an aquarium, and a shopping mall.
Fosun’s Prospective Sale
Fosun, previously known for its ambitious acquisitions, has approached potential buyers and financial advisers about the possible sale of the Atlantis Sanya resort. The conglomerate has been in informal discussions with these potential buyers over the past few months.
Deal Value
The prospective deal value for Atlantis Sanya is undisclosed. However, Fosun revealed in 2018 that it had invested 11 billion yuan ($1.5 billion) in the resort.
Confidential Discussions
Fosun has not publicly acknowledged these discussions taking place. Requests for comments were not immediately responded to by Fosun and its Hong Kong-listed Fosun Tourism Group, the owners of the resort.
Financial Implications for Fosun
This sale could indicate Fosun’s intent to scale back its presence in the tourism sector amid its reported debt of $30 billion as of last June. Moreover, its company Fosun Tourism Group holds other key assets such as Club Med, from which the conglomerate is speculated to be considering selling a minority stake.
Potential Buyers
Fosun has targeted predominantly Chinese state-supported firms and wealthy Middle Eastern investors as potential buyers. The conglomerate is open to selling the entire business or just the luxury hotel.
Fosun’s Portfolio
Fosun Tourism contributes around 9% to the conglomerate’s overall revenue. Fosun International has diversified its interests into healthcare, financial services, and property, besides tourism.
Exchange Rates
($1 = 7.1993 yuan)
($1 = 7.8252 Hong Kong dollars)
Strategic Investment Insights
Investors should consider this possible asset sale as a strategic move by Fosun to rebalance its portfolio and manage its debt. It’s an opportunity for those interested in the hospitality and tourism sector to invest in a well-established integrated resort. Nevertheless, investors must carefully assess the impacts of the ongoing global circumstances on the tourism industry before making any substantial investments.
Source: https://sg.finance.yahoo.com/news/exclusive-chinas-fosun-explores-sale-054453617.html
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