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Wangfujing takes on Belmont’s debt
Posted on Monday, 20 March 2017 11:13
Chinese department store operator Wangfujing Group is spending CNY 5.12 billion (USD 742.20 million) to fully acquire Belmont Hong Kong from controller Wangfujing International while outlining plans to issue corporate bonds worth as much as CNY 2.00 billion.
The shuffling around of commercial real estate includes the assumption of CNY 1.30 billion in debt assumed by the Cayman-Island incorporated investment holding vehicle’s subsidiary.
Formed in 2012, Belmont acquired PDC Stores, a tax haven-registered high-end department stores and outlet malls operator that targeted high-income earners in China, in 2013.
The public takeover happened in two stages worth a combined HKD 5.05 billion (USD 650.58 million at current rates) and has created an enlarged entity which today has 10 department stores and two outlets.
Established more than 10 years ago, Wangfujing International currently has a 38.2 per cent stake in Wangfujing, and is in turn a 65.0 per cent subsidiary of state-controlled department store operator Beijing Wangfujing Dongan.
The ultimate parent is keen to bring an end to competition between its group companies, especially as growth within the traditional retail industry has slowed recently due to online shopping, among other things, of course.
It is redistributing its assets to help Wangfujing expand into gaps in existing markets, though the value is CNY 250.00 million lower than that first mooted last year of CNY 5.37 billion.
Founded in 1955 at China’s busiest commercial street in Beijing, Wangfujing has evolved over the intervening 60-plus years from just one shop into one of the country’s leading retailers.
News of the acquisition came at the same time as the listed group announced plans to issue CNY 2.00 billion-worth of corporate bonds with a term of no more than seven years and to pay a cash CNY 4.30 per 10 shares as a fiscal 2016 dividend.
Wangfujing had revenue of CNY 17.80 billion in the 12 months ended December 2016 (FY 2015: CNY 17.33 billion) and posted attributable net profit of CNY 575.00 million (FY 2015: CNY 661.00 million).
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