Fosun International plans to float its Club Med holiday business in Hong Kong and raise up to $700 million, sources said on Tuesday, three years after it won the global resorts operator in a long-running takeover saga.
Its unit Fosun Tourism Group, which includes Club Med as well as a luxury resort in the southern Chinese seaside city of Sanya, did not give details of the share offering in a prospectus released late on Monday, Reuters reported.
The sources, who declined to be named because the details of the deal are not yet public, said the company aimed to raise between $500 million and $700 million in the initial public offering later this year.
It was not clear how much of the company would be offered to the market.
Fosun Tourism did not immediately respond to a request for comment.
Key Driver
Tourism is a key profit growth driver for its parent, Fosun International, which won control of Club Med in 2015 for $1.09 billion after what was then France's longest takeover saga lasting almost two years.
Fosun reorganized its businesses in 2016, creating Fosun Tourism Group and paving the way for the latter's listing plan.
Club Med now operates in more than 40 countries and has resorts in more than 26 countries and regions, according to the prospectus.
The IPO proceeds will be used mainly to expand the existing business, acquire rights to additional land, fund potential investments and repay outstanding bank loans, the group said in the draft prospectus posted on the HKEX website.
The planned listing comes as tourism assumes a bigger role in China's plans to develop a consumption-driven economy less reliant on investment and exports. Beijing has set a goal to raise tourism revenue to 7 trillion yuan ($1.03 trillion) by 2020, from 5.3 trillion yuan last year.
Fosun was co-founded by Guo Guangchang, China's self-styled version of American billionaire investor Warren Buffett.
In April, Fosun launched its $1.74 billion Atlantis Sanya resort in Hainan, a southernmost province known as China's Hawaii and targeted by the government for tourism development.
Fosun executive Qian Jiannong told Reuters in May that he wanted to make the Sanya resort a destination for middle class Chinese tourists looking for a getaway.
According to the draft prospectus, Fosun Tourism's loss narrowed to 135 million yuan ($20 million) in the first half of 2018, from 189 million yuan in the same period a year earlier.
Revenue at its resorts business—which includes Club Med—rose 9% to 11.8 billion yuan in 2017, the latest full year reported by the firm.
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