Chinese retailer Suning.com disclosed on Monday that through a wholly-owned subsidiary it will contribute RMB 760 million (USD 117 million) to set up a firm to “revitalize its logistics assets and improve profitability,” according to a filing with the Shenzhen Stock Exchange.

CLH (HK) Limited, which is fully controlled by logistics giant GLP, will contribute about RMB 3.04 billion (USD 467 million) to the firm called Zhuhai Puyi Logistics Industry Investment Partnership Limited, along with two general partners, which come up with RMB 10,000 each.

The new company will invest in logistics infrastructure assets in the Chinese mainland directly or indirectly held by Suning, as well as holdings of other companies, and can exit by selling the assets through REITs, initial public offerings, and equity transfers, according to the filing.

Suning, a retailer with both online and offline presence, over the years built up warehousing, long-haul transportation, and last-mile delivery capabilities. “It seems that this LP is set just to offer financing to Suning as money will eventually go to the company which will acquire the logistics assets,” Zhao Baodong, a Shenzhen-based lawyer with Beijing DHH Law Firm, told KrASIA on Monday.

Zhao expects Suning’s contribution not to take place all at once, but rather materialize after the retailer gained some money back through asset sales. According to the filing, the pace of money contribution can be negotiated following the actual business needs of the partnership.

The investment comes shortly after Suning’s founder Zhang Jindong sold a 23% stake to two Shenzhen-based state-owned companies for RMB 14.8 billion (USD 2.3 billion), effectively losing control over the firm he established, which generated RMB 3.9 billion (USD 600 million) in net losses in 2020.