ABU Dhabi Investment Authority (Adia) is considering buying a minority stake in Dalian Wanda Group’s mall operator, sources familiar with the matter said, as the unit revamps its shareholding structure.

Adia has held initial discussions over the potential stake purchase in Zhuhai Wanda Commercial Management Group, the sources said. Adia may buy shares from existing holders, said the sources, who asked not to be identified as the information is private.

An Adia investment would come after billionaire Wang Jianlin gave up control in Zhuhai Wanda in December as part of a landmark agreement to avoid repaying pre-initial public offering investors. Under the terms of the original investments, Wanda agreed to repay investors 30 billion yuan (S$5.7 billion) plus interest if Zhuhai Wanda could not get its IPO done by the end of 2023.

Private equity firm PAG and other investors hold a combined 60 per cent in Zhuhai Wanda, while Wang holds the remaining 40 per cent via another company. PAG invested about US$2.8 billion in Zhuhai Wanda in a 2021 funding round. The mall operator is valued at below 100 billion yuan in the December deal, less than half of what the unit fetched in the fundraising three years ago.

While Wang avoided imminent repayment with the December deal, some investors are still looking to sell back their shares and exit, the sources said. Zhuhai Wanda has approached banks for a loan of about 30 billion yuan as standby cash for any potential redemptions, the sources said.

Country Garden Holdings in December agreed to sell its 1.79 per cent stake in Zhuhai Wanda for about 3.1 billion yuan to the Wanda Group. The Chinese developer said that it is expected to record a loss of about 160 million yuan from the sale.

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Adia’s potential stake purchase is contingent on whether Zhuhai Wanda can secure the 30 billion yuan financing from the banks, the sources said. There’s no guarantee the Abu Dhabi wealth fund will proceed with a deal, they added.

A representative for Adia declined to comment, while representatives for PAG and Zhuhai Wanda did not respond to requests for comment.

Chinese regulators have offered more financial support to developers by broadening access to some commercial loans as many struggle to repay debt and complete projects, including giants such as China Evergrande Group and Dalian Wanda Group. Authorities also recently called on local governments to back developers’ financing needs, drafting a list of projects eligible for funding.

Zhuhai Wanda managed nearly 500 malls across China as at the end of November, including 204 from independent third parties, according to a statement in December. The company filed its Hong Kong listing application for the fifth time in November.

Other than PAG, Zhuhai Wanda attracted a marquee list of pre-IPO investors including Ant Group, Citic Securities and Tencent Holdings, its preliminary prospectus shows. BLOOMBERG