Jiannong Qian, vice president of Chinese private conglomerate Fosun International, announced on November 29 that the spin-off of Fosun’s tourism and cultural unit will be completed by the end of 2016. The unit plans to go public independently in 2020.
ChinaTravelNews reported in August that Fosun planned to spin off its travel and cultural business as “Fosun Tourism and Culture Group” for an independent IPO. The tourism company was registered in September in Cayman Islands.
It will target travel consumption of China’s middle-class families and will act as a core entity to deliver on the company’s “Happiness” tenet, one of Fosun’s three strategic pillars: “Wealth, Health and Happiness”.
Fosun’s management team has hinted on various occasions this year that the company needs to improve liquidity and tap the capital market for various operations. The company has been under credit-rating pressure for the past year due to high debt and leverage ratios.
Fosun Tourism and Culture Group was registered in both Cayman Islands and Hong Kong but the company will operate independently in mainland China. It is still unclear whether the entity may end up going public at home or abroad.
“We have two vital operational characteristics –industry operation and strategic investments,” said Mr. Qian. In the past, Fosun involved in tourism and commercial mostly through investments. It is now extending to cover the entire supply chain linking supply-side offerings and demand-side customer purchases.
Fosun has invested in global travel and tourism companies including packaged vacation provider Club Med, luxury resort brand Atlantis, Canadian theatrical producer Cirque du Soleil and Britain’s largest tour operator Thomas Cook.
Of the acquired global assets, subsidiary Club Med has launched five resorts in China while Thomas Cook China, its joint venture with Thomas Cook, was inaugurated in March 2015.
Mr. Qian said that much of the overall tourism-related investments in China has been channeled into sight-seeing area, while the vacation segment which constitutes 20% share of the tourism market still lacks adequate supply. Fosun is aiming at becoming a consolidator and leader in the vacation sector. (Translated by Jerry)
