Fosun Group’s dollar bonds jumped over 2.5 points on news that it has agreed to sell its stake in the parent company of Nanjing Iron & Steel Co. for RMB 15bn ($2.1bn), as per sources. Bloomberg notes that Jiangsu Shagang Group Co. will be buying a 60% stake in Nanjing Iron from Fosun, with sources noting that the three parties signed an initial agreement last week. Investors’ focus has been on the conglomerate’s asset sale plans given the recent negative news regarding regulatory scrutiny over Chinese banks and SOEs exposure to its debt. Post this, it was downgraded by S&P to BB- from BB citing a reducing liquidity buffer. Moody’s also noted that Fosun may face difficulties refinancing “sizable” short-term debt and would likely increase asset disposals to meet its obligations.
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