The restructuring at Li Ning Co. continues as its co-founder, the Olympic gymnast after whom the firm is named, reorganized the firm’s shares Wednesday.
The Beijing-based firm said it is selling a little more than 25 percent of its shares to sports talent management group Viva China Holdings Ltd., which will buy out the stakes currently held by shareholders Victory Mind Assets Ltd. and Dragon City Management Ltd., for about 1.36 billion Hong Kong dollars, or $175 million at current exchange.
Viva China’s core business is in sports talent management, competition/event production and management and sports-themed community development. It also holds property investments, according to its annual report, and is 56 percent controlled by Li Ning, founder and executive chairman of Li Ning Co., and his brother Li Chun.
Victory Mind and Dragon City are trust funds benefiting members of Li’s family.
Li Ning’s share price fell 4.76 percent to 4.60 Hong Kong dollars, or 59 cents, at the close of trading on the Hong Kong Stock Exchange on Wednesday.
Meanwhile, shares of Viva China surged 84.6 percent to 12 Hong Kong cents, or 2 cents, on the news.
Last week, Li Ning’s CFO Chong Yik Kay resigned from the troubled firm, which in August saw its first-half profit slump 84.9 percent to 44 million yuan, or $7 million, as it closed almost 1,000 stores upon increasing competition from Nike Inc., Adidas AG and Anta Sports Products Ltd.
It also lost its CEO Zhang Zhiyong in July, leaving Li and Jin-Goon Kim, executive vice chairman and a partner at private equity firm TPG Capital, which invested in the firm in January, at the company’s helm until a new CEO is found.