Fosun Invests in $6.9 Billion China High-Speed Rail ProjectBloomberg News
Investment marks rare foray by Fosun into infrastructure
Company had been focusing on tourism, health, wealth
Fosun Group said it will become the first private Chinese company to own a bigger stake than the government in a high-speed railway project, after agreeing to invest in a 46.2 billion yuan ($6.9 billion) venture.
Shanghai Fosun High Technology Co. signed an agreement with the government of the eastern Chinese province of Zhejiang, the company said in a statement on Wechat late Wednesday. Auto-makers Zhejiang Geely Holding Group and Wanfeng Auto Holding Group have also signed up as private partners in the project, a 270-kilometer (168-mile) link between Hangzhou and Taizhou, according to Zhejiang Radio & TV.
Representatives at the automakers weren’t immediately available to comment.
The project marks a rare foray by the Chinese conglomerate into infrastructure sector. Fosun International Ltd., the group’s holding company, has been one of the most acquisitive Chinese firms in the past three years -- buying foreign assets such as French resort chain Club Mediterranee SA and Canadian circus operator Cirque du Soleil -- as part of plans to focus its businesses on tourism, healthcare and wealth.
“Fosun is honored to participate in the project, it is very meaningful," Fosun Chairman Guo Guangchang said during a signing ceremony in Hangzhou, according to the statement.
Fosun will be responsible for raising at least 51 percent of the equity for the project, or 7.1 billion yuan, through its private equity vehicle Sunvision Capital, Fosun said.
Sunvision manages over 30 billion yuan in funds and has a project pipeline worth almost 500 billion yuan across China, according to Fosun. The Zhejiang project will be completed in four years and operate for 26 years, according to the company.
— With assistance by Jing Yang De Morel