The Chinese group Shandong Ruyi – owner of brands such as Aquascutum (pictured), Bally, Sandro and Maje – is burdened by 28 billion of debt renminbi: about 3.98 billion dollars or 3.6 billion euros, almost double of the 2015 quota, which was around 15 billion renminbi. It is no coincidence, as reported by the Financial Times, that the obligations of one of its subsidiaries have collapsed these days in Hong Kong.
According to analysts, the market is worried about the amount of debts accumulated to support the progressive purchases of the group, which has grown to become one of the major Chinese textile operators. Among the most recent deals, the one to conquer the Apparel & Advanced Textiles division of the American Invista, renamed The Lycra Company. Shandong Ruyi is also the largest Chinese holding company of high-end clothing brands, so much so that there are those who call it the China LVMH: there are also TM Lewin, Gieves & Hawkes and Cerruti 1881 in the stable.
A $ 345 million bond expired on Wednesday and will have to be repaid by December 2019. In this regard, Shandong Ruyi commissioned the American investment bank Houlihan Lokey to explore various repayment options, as emerges from the financial newspaper, which cites the company Redd Intelligence searches.
It also appears that many assets in the new portfolio of the company show weak performance from the acquisition, which calls into question the ability to repay the dollar-denominated bond. In a report last October, the S&P Global rating agency defined the liquidity of the eastern player as “persistently inadequate”.
Shandong Ruyi is not the only Chinese group that is in difficulty, so much so that the disinvestments of foreign assets are growing. Between January and September, according to estimates by Dealogic, Chinese companies sold assets held abroad for 40 billion dollars, exceeding 32 billion for the whole of 2018. In the same period, new investments by Chinese groups outside their country totaled 35 billion of dollars: for the first time the former Celestial empire has become a global net seller.