Tuesday, 2023 September 26

After buying loss-making Carrefour, Suning.com sells off majority control of its convenience store operation

Chinese retailer Suning.com has spun off its subsidiary Suning Xiaodian, which runs about 5,000 convenience stores in China, to Suning Smart Life for RMB 745.4 million (USD 108.9 million), according to a document that the company sent to the Shenzhen Stock Exchange on Saturday.

Suning.com holds full ownership of Suning International, which owns 35% of Suning Smart Life. Great Matrix and Great Momentum—both of which are controlled by Zhang Kangyang, son of Suning.com’s chairman Zhang Jindong—control the remaining 65% of Suning Smart Life.

Suning Smart Life now holds a 100% stake in Suning Xiaodian, so Suning.com still maintains 35% of the convenience store chain.

The reshuffling of Suning Xiaodian’s ownership was merely the execution of a decision by Suning.com’s board of directors that was made public as early as October 2018.

In its filing with the Shenzhen bourse, Suning.com said it has collected a loan with a RMB 3.65 billion (USD 533.5 million) principal and another RMB 89.5 million in interest from Suning Xiaodian. The funds were initially put toward Xiaodian’s development.

To guarantee Xiaodian’s smooth operation, Suning Smart Life’s three shareholders have agreed to inject USD 450 million into the firm by subscribing to new shares that will be issued, with Suning International contributing USD 157.5 million, Suning.com added in the filing. Suning.com said it expects this transaction to generate RMB 3.43 billion in net profit for the 2018 fiscal year. It will remove Suning Xiaodian from its balance sheet.

Last week, Suning International bought an 80% stake of Carrefour China’s business for RMB 4.8 billion (nearly USD 700 million).

Jingli Song
Jingli Song
I believe Chinese innovation at various level needs to be known by the world.

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