* Will look at other financing channels if necessary-CEO
* Will buy more overseas retail, entertainment brands-CEO
* Fosun, Prudential to launch China real estate venture
By Kazunori Takada
SHANGHAI, Jan 22 Chinese conglomerate Fosun
International Ltd reassured investors on Wednesday
that it has enough cash on hand to fund the 1 billion euro
($1.35 billion) purchase of the insurance arm of a Portuguese
state bank and it will continue to buy foreign assets to expand
its overseas reach.
Rating agency Moody's Investors Service has put Fosun's debt
under review for a possible downgrade, citing uncertainties over
its funding plan for the purchase of the insurance unit of Caixa
Geral de Depositos SA which comes after a series of
investments last year.
Liang Xinjun, chief executive of Fosun, declined to disclose
its funding plan for the deal, but said the company has enough
cash on hand to pay for it.
"Our own balance sheet is fully capable of paying for it,
but we will also consider other funding channels," he told
Reuters in an interview, adding the firm saw strong growth in
profit last year which will help its balance sheet. The 2013
financial results have not yet been published.
Fosun had 20 billion yuan ($3.31 billion) in cash as of 2012
and 10 billion yuan of securities assets which it could sell if
needed, Liang said.
Liang was speaking after announcing a plan to launch a real
estate joint venture with Prudential Financial Inc which
will target urban projects in China. The companies did not give
a size for their investment, but said without elaborating that
they also expect to work together on real estate projects
outside of China.
The real estate venture is the latest move by Fosun which is
aiming to become a Chinese version of Warren Buffet's Berkshire
Hathaway Inc by using insurance investments as a base
to fund long-term investments in larger companies.
Fosun's chairman, Guo Guangchang, said the Prudential deal
"marks a solid step for Fosun to develop Warren Buffet's model."
Co-founded by Guo, Liang and two classmates from Shanghai's
prestigious Fudan University in 1992 with capital of just
$4,000, Fosun initially set up as a market research firm. It
then moved into the pharmaceutical business in 1997 before
expanding further into areas like steel, retail, mining and
insurance. Both Guo and Liang are ranked among China's top
billionaires, according to Forbes.
Fosun, which is headquartered in Shanghai, is currently
bidding to acquire French resort company Club Mediterranee SA
, after paying $725 million for One Chase Manhattan
Plaza in New York last year. It also obtained a 9.5 percent
stake in Greece's largest jewellery retailer Folli Follie
Liang said Fosun will continue to buy overseas assets in
sectors such as retail, entertainment and finance to be brought
over to the Chinese market.
"In the future, while continuing our investment on luxury
brands, we will also consider brands of experimental consumption
and retail financing," he said.
Fosun also holds stakes in China's Yongan Property Insurance
Co, Hong Kong-based Peak Reinsurance Co, and has formed a
private equity venture with U.S. buyout firm the Carlyle Group