On Thursday, UTour Group Co., Ltd. announced through the Shenzhen Stock Exchange that Feng Bin, the controlling shareholder and actual controller of the company, and Guo Hongbin, a shareholder holding more than 5% of the company’s shares, signed a share transfer agreement with Alibaba (China) Network Technology Co., Ltd.
With the transfer agreement, Alibaba acquired 37,009,442 shares from Feng Bin and 17,764,281 shares of UTour Group held Guo Hongbin at 4.41 yuan per share, and obtained a total of 54,773,723 shares of unlimited tradable shares of the company. The share transfer accounts for about 6.04% of the total shares available and the total share transfer price is about 242 million yuan ($38.12 million). As of the close of December 8, UTour Group’s share price was 4.88 yuan and its market value was 4.423 billion yuan.
The agreement took effect on the same day as the signing date. After the share capital transfer, Alibaba has become the second largest shareholder of UTour Group, holding about 11.06% of the total share capital of the company. Feng Bin is still the largest shareholder and actual controller, while Guo Hongbin is now the third largest shareholder.
UTour Group also announced that this share capital transfer is due to the fact that the company is currently in a critical period of transformation and development. The company is planning to deepen its strategic cooperation with Alibaba and meet the capital needs for its own business development.
On September 30, 2020, UTour Group announced that Feng Bin transferred 45.47 million shares of unlimited tradable shares of UTour Group to Alibaba at a price of 8.46 yuan/share, accounting for about 5% of the total share capital of UTour Group when the share transfer agreement was signed.
In contrast, the current share capital transfer price is 47% lower than the previous one in September last year. At that time, Feng Bin emphasized in an interview with TravelDaily that the core intention of UTour Group is not only to alleviate the financial pressure brought on by the pandemic, but also to take advantage of Alibaba‘s technical ability to bring growth to UTour Group.
The current financial report of UTour Group shows the dilemma faced by many traditional travel agencies under the trying conditions of the COVID-19 pandemic. The operating income of UTour Group in the first three quarters of 2021 was 476 million yuan, down 64.64% year-on-year. Its net loss was 205 million yuan while the net cash flow generated from operating activities was negative, at -213 million yuan. As of September 30, 2021, the current assets of UTour Group were 1.04 billion yuan and the current liabilities were 1.736 billion yuan. The company had 480 million yuan in cash and its short-term loans were 580 million yuan.
For Alibaba, in addition to UTour Group, the tech giant has successively invested in B2B hotel booking tool Daolv, consumer-to-consumer short-term home and apartment rental platform Xiaozhu and bus ticket booking company Best this year.