GLP Pte is in talks with state-owned China Logistics Group Ltd. about potentially selling some of its assets in China, according to people familiar with the matter, as the owner and operator of logistics real estate seeks to cut its borrowing.
A deal could see China Logistics Group take a controlling stake in a portfolio of GLP’s assets in the world’s second largest economy, the people said, asking not to be identified as the information is private. The firms are negotiating which assets should be included in the portfolio and the discussions could still fall apart, the people said.
While the size of a potential deal could not be learnt immediately, the firm’s GLP China Holdings Ltd. unit said it had a net asset value of around $14 billion at the end of 2022. A representative for GLP declined to comment, while a representative for China Logistics Group didn’t respond to requests for comment.
Singapore-incorporated GLP had long been an investor darling in the bond market until last year, when slumping earnings, rising debt levels and corporate-governance concerns pushed some of its dollar bonds to distressed levels.
GLP in May told backers it entered into a memorandum of understanding with an unnamed investor on the potential sale of some assets in China, Bloomberg News reported at that time. Due diligence is underway and the company targets to complete the deal this year, people familiar with the matter have said.
Founded in 2009, GLP has over the years expanded into investment management, data centers and renewable energy while benefiting from demand for warehouse space driven by China’s e-commerce boom. It operates in 17 countries across Asia, Europe and the Americas.
In 2010, GLP raised S$3.9 billion ($2.9 billion) in Singapore’s biggest initial public offering in more than a decade. The warehouse operator was backed by Singapore’s sovereign wealth fund GIC Pte before it was acquired by a consortium including private equity firms Hillhouse Capital Management and Hopu Investment Management for S$16 billion in 2018. The deal was Asia’s biggest buyout at the time.
China Logistics Group was formed in late 2021 when the government merged five state-owned companies in the sector to create a national logistics powerhouse as part of the country’s push to consolidate state assets. Its businesses include rail transit industry, bulk commodity supply chain services, engineering logistics and cross-border e-commerce logistics, according to its website.
State-owned Assets Supervision and Administration Commission and China Chengtong Holdings Group Ltd. each hold a 38.9% stake in the new firm, according to a press release on China Chengtong’s website. Other shareholders include China Eastern Airlines Corp., China Cosco Shipping Corp. and China Merchants Group.
--With assistance from Alice Huang.
(Adds GLP’s scope of operation in sixth paragraph. An earlier version corrected to say China Logistics could take a controlling stake in a portfolio in second paragraph.)