No Offshore Bonds Maturing in the Next 15 Months after Fosun Pays Off its USD600 Million Bond in July

HONG KONG, Jul 5, 2024 - ( JCN Newswire ) - On 2 July, Fosun International (HKEX: 0656) successfully paid off USD600 million maturing US dollar bond. With this repayment, Fosun has now fulfilled all of its offshore bonds obligations due this year, and has no offshore bonds maturing in the next 15 months.

This successful USD600 million bond repayment reflects Fosun's consistent efforts to further reduce its public market bond and optimize its debt structure, after navigating through the maturity wall in 2023, once again demonstrating its operational stability and financial resilience. Furthermore, Fosun has maintained long-term, stable cooperative relationships with broad-based domestic and international banks, giving it the flexibility to time the progress of its asset divestments. Fosun International collaborated with nearly 15 domestic and international banks to raise a syndicate loan of no less than USD600 million in the first half of this year. It is reported that the syndicate is currently in the greenshoe stage, and more banks are expected to join the syndicate.

Despite of many challenges in the global environment, Fosun, on the one hand, has deterministically implemented the strategic adjustment of "operation streamlining and core businesses focusing" and divest sizable non-core and non-strategy assets. On the other hand, Fosun has continued to focus on core industries, optimize its asset portfolio, and enhance its presence in businesses with stable cash flows and profit growth potential. According to public disclosure, since 2022, Fosun has divested assets including Nanjing Iron & Steel, Jianlong Shares, Shanghai PANASIA Shipping, AmeriTrust, Ageas and HAL, etc., in an orderly manner, generating tens of billions in cash inflow.

Fosun's recent divestment of HAL has been well noticed by many market observers. Fosun's asset divestment does not only drive debt deduction, but also optimizes its portfolio mix so that Fosun can achieve asset-light operation. The HAL transaction has demonstrated Fosun's standardized, replicable and sustainable core business operational capabilities encompassing "global operations" and "value realization". Leveraging its in-depth operational management, Fosun supported HAL's M&As, enabling HAL to fully harness the advantages of Fosun's globalization strategy to accelerate business upgrades and enhance asset value. As the consideration of the HAL transaction is higher than the historical total investment cost, the transaction is expected to secure double-digit IRR for Fosun.

In recent years, Fosun has steadily divested non-core assets, demonstrating its asset quality and execution capabilities; at the same time, Fosun has been fully supported by both domestic and international financial institutions, as a vote of confidence to Fosun's credit profile. On 30 May this year, S&P Global Ratings issued a rating report, affirming its stable outlook on Fosun International's long-term issuer and issue credit ratings, with an overall positive stance.

S&P Global Ratings expects Fosun's asset quality and credit quality to remain stable, with possible further improvement. Despite the ongoing complex global macroeconomic landscape, Fosun has maintained stable credit indicators as assessed by S&P Global Ratings, which is attributed to its steadfast pursuit of the core business-focused strategy, further strengthening its organic growth momentum.

In addition to the recognition from banks as well as international credit rating agency, domestic and international investment institutions such as Citibank, UBS, Nomura, and Founder Securities, Kaiyuan Securities, and Essence International have also published research reports expressing their bullish view on Fosun International's steadfast execution of its strategy to focus on core businesses and strike a balance between investment and divestment. These institutions have assigned Fosun International a "Buy" or "Overweight" rating. Essence International gave a target price of HKD7.5 for Fosun, implying a potential upside of 78% from the current price.