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Fosun-controlled Shanghai Yuyuan sets up firm to invest in airline cos - filing

BEIJING: Shanghai Yuyuan Tourist Mart Group, one of China's leading retailing companies, will set up a firm along with affiliates and strategic investors to invest in airline companies, it said on Wednesday.

Shanghai Yuyuan is controlled by a unit of Fosun International, a Chinese conglomerate with businesses in financial, property, healthcare industries.

The new entity will be called Yuyuan Aviation Industry Limited Partnership with a combined capital injection of no more than 40 billion yuan (US$6.2 billion), Shanghai Yuyuan said in a stock filing.

Yuyuan's announcement came as the bankrupt HNA Group is looking for private capital to avoid liquidation. HNA Group's flagship business is Hainan Airlines, China's fourth-largest airline.

Private Chinese carrier Juneyao Air last month said it is setting up an investment firm with a combined capital injection of a maximum of 30 billion yuan, and financial magazine Caixin said the new company is bidding for bankrupt HNA Group's airline assets.

Like Juneyao, Shanghai Yuyuan did not mention whether the new firm will invest into Hainan Airlines, but warned returns may not reach expected levels even if the investment has been successful.

(US$1 = 6.4383 Chinese yuan renminbi)

(Reporting by Stella Qiu and Ryan Woo; Editing by Toby Chopra)

Source: Reuters


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