The rating agency Moody's downgraded the debtor quality of the Chinese investment company Fosun to "B2" on Tuesday.

In the eyes of Moody's, countries such as Bolivia, Jamaica and Cameroon have an equally poor credit rating.

Moody's justifies the new rating for Fosun with the weak liquidity of the investment company.

Hanno Mussler

Editor in Business.

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According to Moody's, Fosun does not have enough cash on hand to pay off the debt due in the next 12 months.

The expected dividends from the company investments, in turn, did not cover Fosun's upcoming interest payments and operating costs.

Fosun has apparently already presented analysts with a plan to sell shares equivalent to EUR 11 billion over the next twelve months.

Moody's can no longer have this information first-hand because the rating agency, which usually charges companies for their credit ratings, has fallen out of favor with Fosun.

Chief Financial Officer denied

That doesn't change the fact that all sorts of rumors are circulating in Germany about Fosun.

The Chinese investment company is the owner of the Hauck Aufhäuser Lampe bank in Germany.

"Hauck Aufhäuser lamp is by no means for sale," said Fosun's CFO Alex Gong at the request of the FAZ on Tuesday.

Previously, the Bloomberg news agency claimed almost the complete opposite.

Under the headline "Fosun is examining options for Bank Hauck Aufhäuser Lampe", however, Fosun has already made a denial.

There is some evidence that the same applies here: where there is smoke, there is fire.

There's no doubt that companies like Fosun, which finance their holdings with heavy borrowing, are vulnerable in times like these of rapidly rising interest rates.

Bank on course for growth

Hauck Aufhäuser Lampe has grown significantly under Fosun in recent years.

The purchase of the Lampe-Bank, which until then had belonged to the Bielefeld industrial family Oetker, had been in place for a year.

Fosun had previously bought fund service providers in Luxembourg.

In addition, the bank created new pillars with crypto assets.

It thus strengthened its role as a securities custodian, also with fungible tokens such as ether and non-fungible tokens such as digital art objects stored as smart contracts in a blockchain.

In addition, Hauck Aufhäuser Lampe even set up its own funds with crypto assets.

2021 was an excellent financial year for Hauck Aufhäuser Lamp.

The sources of income, interest income and net commission income, each rose by an impressive 40 percent.

However, the signs have changed this year: bond and stock prices have fallen sharply, especially crypto assets such as Bitcoin.

Investment banking, which is also an important division of Hauck & Aufhäuser, is seeing declining fee income in all banks around the world.

And a Chinese owner is viewed with increasing skepticism in Germany.

It was already a political issue when Fosun outbid the French banker Philippe Oddo in 2015 and snapped up the private bank Hauck & Aufhäuser with roots dating back to 1796.

The German banking supervisory authority checked the new owners for their reliability for an unusually long time.

Fosun founder Guo Guangchang, respectfully dubbed the “Warren Buffett of Shanghai” after the legendary US investor, was known as a collector of strong Western tourism brands such as Club Med and entertainment brands such as Cirque du Soleil.

He bought into the English football club Wolverhampton Wanderers and into healthcare companies such as the German Biontech.

But Guo disappeared without a trace for a few days in 2015, which has since cast doubt on how well-liked Fosun is by China's rulers.

At least as important: Fosun finances its acquisitions with a large number of loans that are more difficult to refinance in times of higher interest rates.

Now Fosun is reportedly working with the big Asian banks ICBC and HSBC to secure new lines of credit.