Aquascutum's fall 2016 campaign

LONDON — Ruyi Group, previously known as Shandong Ruyi, has received a 3.5 billion renminbi, or $495 million at current exchange, investment from Jining City Urban Construction Investment Co., Ltd.

Jining City Urban Construction Investment has become the second-largest shareholder of the company, owning 26 percent. Yafu Qiu, chairman of the parent company to Sandro, Maje, Claudie Pierlot, Lycra, Aquascutum, Kent & Curwen, Gieves & Hawkes and Cerruti, remains as the single controlling shareholder of Ruyi Group.

The new investor is a state-owned enterprise directly managed by the State-owned Assets Supervision and Administration Commission of Jining. Jining is a prefecture-level city in southwestern Shandong province.

The investment provided a much-needed cash injection as Ruyi is facing serious debt issues, and Moody’s downgraded Ruyi Group earlier this month. It’s estimated that Ruyi needs to pay off near 10 billion renminbi in debt by 2020.

“The downgrade of the ratings reflects our expectation that Shandong Ruyi’s liquidity will remain weak and debt leverage will stay elevated,” says Chenyi Lu,  vice president and senior credit officer at Moody’s.

“The ratings remain on review for further downgrade because of our increased concern over Shandong Ruyi’s ability to service its large onshore and offshore debt maturities over the next 12 to 18 months, given the company’s limited progress on its refinancing plans,” adds Lu.

According to Ruyi, the capital contribution represented an endorsement by the local government.

Qiu said that “Amidst current macroeconomic conditions, the cooperation between state-owned enterprises and privately owned companies is becoming increasingly important to the market, with the aim to achieve mutual benefits, enhance overall functionality and efficiency of the economy and optimize the allocation of capital.”

“Ruyi Group has developed from a domestic textile enterprise into a global fashion group driven by technological advancement and fashion brand retail business with a well-established industry ecosystem. We are very delighted to have the support and affirmation from the government. As an outstanding industry leader, Ruyi Group is confident to continue to integrate global resources and optimize its capital structure in a bid to achieve sustainable, stable and healthy business growth,” he continued.

 

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