Chinese conglomerate Fosun is currently negotiating with investors to raise fund for the planned overseas acquisitions of its tourism unit, amid regulators' tightened scrutiny of outbound transactions, the Business Standard reported.
Qian Jiannong, president of Fosun Tourism & Culture Group, said that they are planning the first round of fundraising with domestic and international investors, which will be used for its overseas merger and acquisitions (M&As), before public listing.
"We will increase (overseas) investment in the next few years and the area or regions that are most important for us are really not only where Chinese people have an interest in, but also the global regions where the tourism business is attractive," Qian said in an interview.
"We have been in talks with many companies since 2010. Currently, we are also talking to a few companies, but I can't comment on any potential deals and projects at this stage," Qian added.
In 2016, after Chinese companies made record M&As overseas, the Chinese government has tightened capital outflows, in an effort to ease pressure on the yuan, which dropped to its eight-year low in December.
Qian, however, said that it would not hamper the company's expansion goals.
"Fosun, as a global enterprise, won't be affected by such restrictions because we have enough offshore capital to conduct M&A deals overseas," Qian was quoted as saying.
"If it's an overseas target, we will definitely use our offshore platform to acquire it. We have units incorporated abroad and at home," he added.
Qian said that the unit has not yet set the date for public listing but the company is encouraging its units "to go public at an appropriate time".
Chinese companies such as Fosun, Dalian Wanda Group Co and HNA Group have increased their investments in tourism, which is seen to drive growth as the country shifts toward a consumer-driven economy. In 2016, the domestic tourism industry earned a total of 3.9 trillion yuan ($567.3 billion), which the government wants to raise to 7 trillion yuan by 2020.
CSLA, a brokerage firm, said that China will account for about 14 percent of the global outbound travel in 2020. From 125 million in 2015, overseas trips made by Chinese tourists rose to 200 million a year at the end of last year.
In the first six months that ended in June 2016, the profit of Fosun's tourism unit rose by 76 percent to 365.4 million yuan, beating the 25.5 percent increase of the conglomerate health segment and the 13.7 percent gain of its wealth management sector in the same period.
The conglomerate's investment segment doubled its profits while the profits of its property development segment saw 600 percent growth, the firm said.
Qian said that Club Med also plans to open 20 new resorts in the country in the next few years. He added that their investment team is looking for leisure tourism targets across the world, which include hotel brands, theme parks and travel agencies.
"Definitely we still have the investment teams in our new group and they're still searching some new targets to buy and also find some companies that maybe we won't merge with or acquire them, but we can have very good cooperation with them," Qian added.