On a mission to shrink its international footprint and contain debt, the conglomerate has sold off property holdings in what was a key European base
Key Takeaways:
- The building units in a Lisbon urban renewal project were sold to the Portuguese central bank for around 190 million euros
- Last year Fosun International spent 11.1 billion yuan on maturing bond payments
By Lee Shih Ta
More than a decade ago, Fosun International (0656.HK) used Portugal as a base for an overseas expansion strategy. The company has since reversed course and is now selling assets in what was once a key European hub.
After progressively shedding non-essential assets to shore up its finances, Fosun International has sold some of its interests in a business, retail, and residential complex in Lisbon.
The announcement, made on Tuesday, covers rights over units in two planned buildings in Lisbon’s Entrecampos project. The assets were sold to Banco de Portugal for approximately 192 million euros ($218 million or 1.58 billion yuan).
The Lisbon site is being redeveloped as part of an urban renewal project led by the property arm of Portuguese insurer Fidelidade, in which Fosun International holds a controlling stake.
The assets account for about 19% of the expected construction area of the entire Entrecampos project, which includes six buildings.
Reducing real estate risks
In 2018, Fidelidade obtained land from Lisbon’s city authorities for around 274 million euros, covering a 25-hectare development area. The investment for the site was projected at between 750 million and 800 million euros, with plans to build around 900 housing units, including 279 for sale and the rest for affordable rental.
The complex, scheduled for completion in the second half of 2027, will also include offices, shops, restaurants, and green space.
The company stated the disposal would reduce risk exposure in the real estate business and help manage uncertainties. Identifying prestigious building tenants would enhance the project’s credibility, while reducing lettable office space would mitigate leasing risk. Proceeds from the sale will be used to replenish general operating funds.
Portugal has long been important to Fosun International’s expansion. In 2014, the company secured a controlling stake in insurer Fidelidade for 1 billion euros, and later acquired Portuguese private healthcare group Luz Saúde for 860 million euros. It also became a majority shareholder in Banco Comercial Português (BCP) for 175 million euros.
However, the company began scaling back its international reach in 2022, selling non-core assets and reducing international investments to lower its debt burden.
In January 2024, Fosun International sold a 5.6% stake in Portuguese commercial bank Millennium BCP for 235 million euros, retaining a stake of over 20%. In May last year, a stake of approximately 99.74% in German private bank Hauck Aufhäuser Lampe (HAL) was sold to ABN Amro Bank for around 670 million euros. In July, a ski resort in Japan, Hoshino Tomamu, was sold to YCH16 for around 40.8 billion yen ($280 million).
Sweeping sell-off over three years
Last year alone, divestment deals totaling around 17.5 billion yuan were signed at the group level, and 30 billion yuan at the consolidated level, according to Fosun International’s annual results released at the end of March. The company divested around 75 billion yuan between 2022 and 2024. It also paid bondholders 11.1 billion yuan on matured debt last year.
Total liabilities at the end of 2024 increased slightly to 214.1 billion yuan, a 1% rise from the previous year, and the ratio of total liabilities to capital rose from 50% to 52%. However, cash reserves increased by 13.88 billion yuan to 106.34 billion yuan. The company aims to reduce interest-bearing liabilities to around 50 billion yuan within one to two years.
Fosun International’s revenue fell 3.1% last year to 192.14 billion yuan, while industrial operating profit totaled 4.9 billion yuan. The company reported a loss of 4.35 billion yuan, primarily due to an impairment loss of 5.1 billion yuan related to Alibaba’s repurchase of shares in Cainiao. Excluding this, it would have posted a profit of 750 million yuan.
The company completed a buyout of Fosun Tourism last year, but a similar plan to take control of its partially owned subsidiary Shanghai Henlius Biotech（2696.HK）was unsuccessful due to opposition from minority shareholders. Chairman Guo Guangchang viewed the failed plan as a sign of shareholder confidence in the biopharma firm’s future within Fosun.
Guo stated the company had shifted away from asset-heavy projects and toward innovative industries with growth potential. Fosun Pharma (2196.HK) acquired an additional 3.9% of Henlius Biotech shares in mid-April, bringing its total holdings to 63.43%.
Fosun International is currently trading around a 52-week low of HK $4.15 per share, down about 8.8% this year, resulting in a price-to-earnings ratio of 4.33 times. The ongoing divestment strategy and improving debt situation suggest potential for future gains.
To subscribe to Bamboo Works weekly free newsletter, click here
