Investing.com – Suning.com’s shares surged 10.02% in Shenzhen trading on Tuesday after Suning empire raised $1.36 billion in a state-backed bailout for its listed retail arm to clean up the indebted conglomerates.
Previously, Shenzhen-listed Suning.com filed for a trading halt on Jun. 16 due to debt pressure.
The group of investors that participated in the fund was led by the Nanjing state asset management committee and the Jiangsu provincial government, alongside Alibaba (NYSE:BABA) Group Holdings Ltd., Midea Group Co., Haier Group Co., Xiaomi (OTC:XIACF) Corp., and TCL Technology Group Corp.
After the transaction, they will take a 16.96% stake in Suning.com, while none of the major shareholders will have a controlling stake. China’s billionaire Zhang Jindong will no longer control Suning.com after the bailout.
“The diversified investor portfolio helps push Suning.com to further improve the corporate governance, operations and business transformation as a retail service provider… the fund will actively support Suning to grow healthily and stably,” the company said in a statement.
In a separate statement released on Monday, the retail arm of Suning said it posted a loss of 2.5 billion yuan to 3.2 billion yuan in the first half of 2021.
Suning.com, one of China’s biggest retailers of appliances, electronics and other consumer goods, was valued at about 52 billion yuan ($8 billion) before the trading halt. Its retail business was hurt during COVID-19 and investors were concerned about its cash flow in September 2020 when Zhang waived his right to a 20 billion yuan payment from property developer China Evergrande Group.