Chinese e-commerce giant JD.com (NASDAQ: JD) disclosed to the SEC on Monday that Caissa SEGA Tourism Culture Development Group Co., Ltd has agreed to buy JD.com’s shares in online travel agency Tuniu (NASDAQ: TOUR) at RMB 457.6 million (USD 64.6 million).
This deal comes as Tuniu is being hard hit by the COVID-19 pandemic. Tuniu generated RMB 174 million (USD 24.6 million) in revenue the first quarter of 2020, down 61.9% year-on-year (YoY), and predicted its second quarter revenue to drop as high as 96% YoY , according to a press release of the company on June 10.
Sale of these shares, which represent 22.1% of outstanding Class A shares, or 14.8% of total voting power, of Tuniu, will lead to a huge loss for JD.com, which paid USD 350 million to gain only part of these shares in Tuniu in May 2015, according to a Tech in Asia report.
The buyer, Caissa SEGA Tourism Culture Development Group Co, is controlled by Chen Xiaobing. Chen also controls travel service provider Caissa Tosun Development Co.Ltd (SHZ: 000796), of which JD.com agreed to buy a 7.4% stake at RMB 450 million (USD 63.5 million) in April.
This article is part of KrASIA’s “China Brief” section, where KrASIA’s reporters will provide quick daily updates about the tech ecosystem in China.