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Trip.com mulls ways to delist: Reuters
Posted on Wednesday, 29 July 2020 07:02
Trip.com Group is considering ways to delist from Nasdaq amid growing tensions between China and the US, more stringent regulatory audit requirements and scrutiny, and the fallout from the coronavirus on the travel industry, Reuters reported.
Sources with knowledge of the situation told the news provider the Chinese tourism-focused booking giant has already started sounding out the possibility of a take-private with support from financial and strategic investors.
The people noted Trip.com has contacted private equity houses and domestic technology players, though they cautioned discussions are at an early stage.
However, any delisting via a take-private deal would need to win over minority shareholders, which could present a hurdle considering the group’s diversified ownership structure, Reuters added.
According to the annual report for the year ended 31st December 2020, as at 29th February 2020, the group’s largest backer, Baidu, only held an 11.7 per cent stake.
Scottish investment manager Baillie Gifford had a 7.7 per cent interest, followed by Naspers-owned MIH Internet SE (5.5 per cent) and T Rowe Price (5.4 per cent).
Trip.com, perhaps better known as Ctrip, has seen its market value fall by 25.0 per cent since the start of 2020, from USD 36.97 on 2nd January to USD 27.72 and a capitalisation of USD 16.44 billion yesterday.
Furthermore, Q1 2020 results have been significantly and negatively impacted by Covid-19, as net revenue slumped 42.0 per cent to CNY 4.74 billion (USD 669.00 million) from CNY 8.17 billion in Q1 2019.
A profit of CNY 4.59 billion in Q1 2019 fell to a loss of CNY 5.34 billion in Q1 2020.
Trip.com noted: “The pandemic drove a significant decline in travel demand resulting in reservation cancellations and reduced new orders.
“In addition, the bad debt provisions and impairments of long-term investments both increased.”
© Zephus Ltd