Three companies including Suning Appliance Group have applied for bankruptcy reorganization and have been accepted by the court. This means that the once well-known Chinese retail giant, Suning Group, will have three of its companies entering bankruptcy reorganization proceedings. It is noteworthy that at least three trust companies under the control of the Chinese central enterprises have been implicated due to Suning’s troubles.
According to reports from The Paper and 21st Century Business Herald, on February 8, the National Enterprise Bankruptcy Reorganization Case Information Network released the announcement of the opening of the account selection for the bankruptcy administrator of Suning Appliance Group Co., Ltd. (referred to as “Suning Appliance”), Suning Holdings Group Co., Ltd. (referred to as “Suning Holdings”), and Suning Property Group Co., Ltd. (referred to as “Suning Property”, collectively referred to as “the three companies”).
The announcement indicated that the Intermediate People’s Court of Nanjing (referred to as “Nanjing Intermediate Court”) had on January 26, 2025, respectively ruled to accept the bankruptcy reorganization of the three companies. Upon the application by Jiangsu Tianjianhuachen Asset Appraisal Co., Ltd., the court accepted the bankruptcy reorganization case of Suning Holdings Group Co., Ltd.; and upon the application by Suzhou Mantis Building Decoration Co., Ltd., the court accepted the bankruptcy reorganization cases of Suning Appliance Group Co., Ltd. and Suning Property Group Co., Ltd., and designated the Beijing Guodu Law Firm, Jiangsu Fade Dongheng Law Firm, and Beijing Zhonglun (Nanjing) Law Firm as the administrators of the three companies to carry out various reorganization works.
On February 7, the National Enterprise Bankruptcy Reorganization Case Information Network issued announcements regarding the bankruptcy reorganization cases of Suning Appliance, Suning Holdings, and Suning Property.
The announcements revealed that on January 26, 2025, Suning Appliance, Suning Holdings, and Suning Property had their bankruptcy reorganization cases accepted by the Nanjing Intermediate Court, with case numbers (2025) Su01 Po2, Po3, Po4. On the same day of acceptance, the court designated Beijing Guodu Law Firm, Jiangsu Fade Dongheng Law Firm, and Beijing Zhonglun (Nanjing) Law Firm as the legal representatives of Suning Appliance Group Co., Ltd. and the other two companies.
This signifies that the retail giant of the past, Suning Group, will see three of its companies entering bankruptcy reorganization proceedings.
Suning Appliance and Suning Holdings are shareholders of the listed company ST Yigou, holding 1.4% and 2.75% respectively. Additionally, all three companies are founded by Zhang Jindong, who currently holds 51% of Suning Holdings’ shares, 50% of Suning Appliance’s shares, and 17.7% of ST Yigou shares.
Prior to this, on January 26, ST Yigou issued a progress report on shareholders’ reorganization, stating that Suning Appliance and Suning Holdings are not the controlling shareholders or actual controllers of the company, and that the reorganization of the aforementioned shareholders will not impact the company’s governance structure.
According to reports from Sina Finance, Suning Group was once considered one of the outstanding players in the Chinese retail industry. Looking back, it evolved from a simple air conditioning specialty store to becoming a comprehensive appliance chain giant and then transformed into an online retail platform.
Moreover, Suning’s investment extends beyond its retail core business into various industries including real estate, logistics, sports, and esports.
In September 2019, Suning Yigou acquired an 80% stake in Carrefour China for 4.8 billion yuan. Currently, Carrefour China has closed over a hundred stores.
In 2020, a 20 billion yuan investment in Evergrande by Suning was unable to be recovered and transformed into shares, bonds of “16 Suning 02” were extended, the subsequent financial situation continued to deteriorate, in 2021, it posted the highest net loss among A-share companies, in 2022, revenue greatly decreased, and the debt ratio surged, also facing lawsuits for debts. By the end of 2023, several Suning-related companies in multiple regions had bankruptcy applications filed for them.
Of note, at least three trust companies under the control of the Chinese central enterprises were implicated.
Since 2022, after taking over various real estate projects from troubled companies like Evergrande and Sunac, the Five Minerals Trust under the Five Minerals Group extended a helping hand to Suning Property. In July of the same year, Suning Property transferred 100% of the equity of Nanjing Manchigufu Property Co., Ltd., with Five Minerals Trust taking over.
At the end of 2023, the China Xin Group’s China Citic Financial Assets launched a relief project for Suning Yigou with an upper limit of 5 billion yuan, with the initial batch being 1.549 billion yuan.
Furthermore, the China Mechanical Industry Group’s China Rong Trust also faced implications. According to information obtained from within the trust industry, a defaulted product named China Rong Trust-Jiyue 123 Collective Fund Trust had a total scale of 2.58 billion yuan, with only 2.295 billion yuan actually raised, and a term of 2 years.
According to the 2023 annual report, Suning Appliance had total assets of 124.96 billion yuan, but a net loss of 5.703 billion yuan, with total liabilities of 134.479 billion yuan.
On May 22, 2024, the American investment fund Oaktree Capital announced that due to a failure in repayment of loans and interest by the Chinese company Suning, Oaktree Capital would take over the ownership of Suning Holdings’ acquisition of the international Milan Football Club, Inter Milan, based on an agreement.
This marks the end of the Suning era and signifies the downfall of China’s peak involvement in European football. Additionally, this is the first time an American company will have control over Inter Milan.