Wanda Selling $5.4 Billion Property Unit Stake, to Seek Listing ‘Soon’

By Bloomberg News / Bloomberg | January 31, 2018 3:27 PM SGT
Dalian Wanda Group Co. said it is getting a 34 billion yuan ($5.4 billion) investment in its property arm from a group of investors and will strive to take the company public as soon as possible, easing pressure on the conglomerate to meet a listing deadline. The unit’s bonds soared.
Chinese internet giant Tencent Holdings Ltd. is leading the acquisition of the 14 percent stake in billionaire Wang Jianlin’s Wanda Commercial Properties Co., Wanda said on its website late Monday. Tencent and other e-commerce, retail and real estate companies are buying a stake held by private equity investors who were guaranteed annual returns of as much as 12 percent if the company failed to list by September 2018.
The unit will be renamed Wanda Commercial Management Group, underlining the real-estate business’s transition away from property development to management. The country’s largest owner and operator of shopping malls was delisted from the Hong Kong stock exchange in 2016 in a $4.4 billion privatization. The $5.4 billion investment announced Monday represents a 23 percent gain from the 2016 price in what was the city’s biggest-ever going-private deal.
Chinese billionaire Wang Jianlin (Photographer: Patrick T. Fallon/Bloomberg) - EDGEPROP SINGAPORE
Chinese billionaire Wang Jianlin (Photographer: Patrick T. Fallon/Bloomberg)
Under terms of the 2016 sale to private equity investors, Wang would have had to pay back investors who backed the buyout with a 12 percent annual return for domestic investors, and 10 percent for those overseas, should the company fail to list on China’s mainland by September 2018.
Wanda Commercial Properties Hong Kong’s 2024 bonds rose 5.3 cents on the dollar to 105.7 cents after its Monday announcement.
Separately, Wanda put its last two overseas property developments up for sale, according to people familiar with the matter, in the latest unwinding of a decade-long overseas buying spree that drew scrutiny from Chinese regulators. The group is seeking buyers for a hotel, office and apartment complex in Chicago and a development in Beverly Hills, California, said the people, who asked not to be identified because discussions are private
Beijing-based Wanda declined to comment specifically on the U.S. projects. In a filing Monday related to the sale of two Australian projects, the group referred to “the proposed disposal of the group’s project in America,” without elaborating.
Chart: Wanda has more than $40 billion of property worldwide, according to RCA - EDGEPROP SINGAPORE
The consortium formed to take the stake in Wanda’s property unit includes e-commerce provider JD.com Inc., property company Sunac China Holdings Ltd. and Suning Commerce Group Co. -- a retailer backed by e-commerce giant Alibaba Group Holding Ltd., according to Wanda’s statement late Monday.
That deal also furthers the Wanda unit’s transition from a company that builds and sells projects, to one that gets more revenue from leasing than from sales. Wanda Commercial also said late Monday it will offload projects being developed for sale to a third party within one to two years and will no longer develop property.
Wanda Commercial, the group’s flagship, operated 235 Wanda Plazas in China that received 3.19 billion visitors last year. Wanda had planned to expand that number to 1,000 within a decade. The group also owns cultural tourism parks, hotels, cinemas, children’s entertainment and other consumer businesses.
Separately, Wanda Hotel Development Co. shares soared as much as 52 percent after the company confirmed the sale of two Australia property projects for A$315 million ($255 million). The stock closed at HK$1.65 for a gain of 22 percent from the Jan. 18 closing price. Trading in the shares had been suspended pending an announcement.
Last week, Wang said Wanda wouldn’t experience any defaults and intended to pay off overseas debt through all necessary means, including asset disposals.
— With assistance by Jing Yang De Morel
This story, written by Bloomberg News, first appeared on Jan 30.