Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Fosun International Ltd. is weighing a sale of International Gemological Institute in a deal that could value the diamond-grading firm at about €200 million ($215 million), according to people with knowledge of the matter.
The Chinese conglomerate is working with Deutsche Bank AG on the potential divestment of the Antwerp, Belgium-based institution, said the people, who asked not to be identified as the information is confidential.
Considerations are preliminary and Fosun may decide to keep the asset, the people said. A spokesperson for Deutsche Bank declined to comment, while representatives for Fosun and Shanghai Yuyuan Tourist Mart Co., the Fosun unit that owns an 80% stake in IGI, didn’t immediately respond to requests for comment.
Backed by billionaire Guo Guangchang, Fosun is one of China’s largest non-state conglomerates with businesses including consumer, health care, property, financial services and mining. The firm is in the midst of trying to bolster its balance sheet and investor confidence. It told analysts in October that it’s targeting to sell as much as $11 billion of assets within 12 months.
Fosun’s bonds have rebounded recently after it unveiled a slew of planned asset sales and began weighing billions of dollars in other potential deals, including for resort chain Club Med as Bloomberg News reported in November. Last week, the company announced it would sell stakes in four units to raise about $975 million.
Shares of Fosun have risen about 12% this year in Hong Kong, giving the conglomerate a market value of about $7.5 billion.
Founded in 1975, IGI is one of the two main institutions that certify diamonds and other gems for their color, cut, clarity and weight. IGI operates 20 laboratories globally, grading finished jewelry, natural diamonds, lab-grown diamonds and gemstones, its website shows. It also runs 14 schools of gemology that train professionals in the diamond industry.
Shanghai Yuyuan bought an 80% stake in IGI in 2018 for $108.8 million from shareholders Roland Lorie and Marc Brauner. The founding Lorie family kept the remaining 20%.
(By Vinicy Chan, with assistance from Shirley Zhao)
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