Jul 03, 2024 05:53 PM
BUSINESS
Debt-Laden Chinese Supermarket Chain Gets Nod for $344 Million Share Sale
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What’s new: A court has approved a once-top Chinese supermarket chain operator’s debt restructuring plan to raise 2.5 billion yuan ($344 million) by selling new shares to a group of investors.
Xiangtan Intermediate People’s Court in Central China’s Hunan province gave Shenzhen-listed Better Life Commercial Chain Share Co. Ltd. (002251.SZ) and its 14 subsidiaries the go-ahead on Sunday to proceed with the reorganization, the company said in a stock exchange filing dated Tuesday.
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- A Chinese court approved Better Life Commercial Chain Share Co. Ltd.'s debt restructuring plan to raise 2.5 billion yuan ($344 million) by issuing new shares.
- This move aims to improve the supermarket chain operator's asset-liability structure and profitability amidst competitive pressures from online and smaller stores.
- Better Life, once a leading chain, returned to profitability in Q1 2023 with a net profit of 20.2 million yuan, reducing marketing and administration expenses.
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Who’s Who
- Better Life Commercial Chain Share Co. Ltd.
- Better Life Commercial Chain Share Co. Ltd., founded in Xiangtan in 1995, was once one of China's top supermarket chains. It faced financial trouble due to heavy real estate investments but recently returned to profitability with a net profit of 20.2 million yuan in Q1 2023. The company is undergoing a debt restructuring plan to raise 2.5 billion yuan by selling new shares, aimed at improving its asset-liability structure.
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What Happened When
- Sunday, July 2, 2023：
- Xiangtan Intermediate People’s Court approved Better Life Commercial Chain Share Co. Ltd.’s debt restructuring plan.
- Tuesday, July 4, 2023：
- Better Life Commercial Chain Share Co. Ltd. announced the court's approval and details of the restructuring plan.
- By the end of 2023：
- Better Life had an asset-to-liability ratio of 86.76%.
- First quarter of 2024：
- Better Life reported a net profit attributable to shareholders of 20.2 million yuan.
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