Recently, media reports disclosed that China Logistics Group has completed due diligence on some Chinese assets that GLP plans to sell. The transaction is expected to be completed by the end of this year.
Since its establishment, China Logistics Group has attracted significant attention from the public. As the “national team” in logistics, its mission is to build a world-class logistics enterprise. Therefore, its every move represents logistics trends and future expectations.
Why is China Logistics Group acquiring part of GLP’s Chinese assets? What advantages do these assets have that attract China Logistics Group?
Anticipating Economic Structural Changes
GLP offers $7 billion worth of assets for sale.
According to a previous Bloomberg report, GLP has provided $7 billion (approximately 51 billion RMB) worth of Chinese assets for China Logistics Group to choose from.
First, let’s look at GLP. In February this year, GLP announced a structural adjustment—its global fund management business was split and integrated into a new global alternative asset management company—GLP Capital Partners (GCP).
Specifically, GLP Capital Partners (GCP) became GLP’s exclusive investment and asset manager, seeking long-term stable and attractive investment returns; while GLP continued to focus on new infrastructure in supply chain, big data, and new energy sectors.
Meanwhile, GLP has a new perspective on future business development.
Because of its deep involvement in high-standard logistics warehouses and cold chain warehouses, GLP is more sensitive to changes in international markets, regional markets, and industries. Recently, Zhao Mingqi, Co-President of GLP China, stated in an interview with the “National Business Daily” that new growth engines in logistics and warehousing operations include new energy, cross-border e-commerce, fresh cold chain, and digital transformation. These economic structural changes are creating new market opportunities.
Additionally, given the new global economic landscape, the return of the U.S. dollar is inevitable, and various strategies by the Federal Reserve are accelerating the withdrawal of funds from outside the U.S. This will affect foreign companies, especially those with U.S. debt that is approaching maturity.
According to “Little Debt Market Watch,” as of May this year, GLP had 16 outstanding bonds with a total scale of 21.563 billion RMB. Therefore, “Real Estate Guide” reported that the reason for this transaction between GLP and China Logistics Group is to use the proceeds from the asset sale to reduce the company’s leverage and repurchase debt.
These three reasons combined might be the basis for the cooperation between GLP and China Logistics Group.
Cited from https://new.qq.com/rain/a/20231009A08LED00
Post time: Aug-06-2024