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China's Wanda plans 'large-scale' capital ties with retail giant Suning
[SHANGHAI] China's Dalian Wanda Group said it expects to form significant capital ties with retail giant Suning Commerce Group and outlined a rapid expansion for its real estate empire - bullish plans that come at a time when it is seeking to reassure investors about its finances.
Wanda has invested heavily in entertainment and sports assets over the last few years, but like other Chinese conglomerates its dealmaking has drawn the gaze of domestic regulators looking to stem perceived risky spending overseas.
"From next year, Wanda and Suning will arguably be among the companies which embark on the deepest cooperation," the group's billionaire founder Wang Jianlin said at a Suning event on Tuesday, according to a copy of the speech.
"We will also have capital cooperation. Next year, there will be such cooperation on a large scale."
A spokeswoman for Suning declined to comment saying that the company did not have any information to share.
Wanda and Suning signed a cooperation deal in 2015 for the electronics retailer to open stores at Wanda Plazas - which are commercial real estate development projects - throughout China.
Earlier this year, Wanda agreed to sell most of its tourism projects and hotels in China to local rivals for about US$9 billion.
Just last week, responding to a local online media report that questioned its financial health, it issued a statement that the firm's operations were normal and that globally it had not defaulted on any loans, adding that 2017 revenues had exceeded US$30 billion.
In addition to capital ties, next year's partnership with Suning will also see the two companies work together on stores and other areas, Mr Wang said.
He also said in his speech that over the next 10 years Wanda aimed to open over 700 new Wanda Plazas which incorporate shops, food, entertainment and cultural activity areas.
Wanda, which runs 231 Wanda Plazas, has accelerated openings in the last two years with more than 100 new complexes. Prior to 2016, it opened at most 25 of these schemes a year.
"We have a grand vision to run about 1,000 Wanda Plazas within 10 years (as of 2028) from next year," the speech said.
"In the past two years, it seems that brick-and-mortar businesses have come booming back as many Internet enterprises and giants have shifted their focus towards offline expansion,"he said.
Wanda Commercial Properties, which is responsible for Wanda Plaza openings, posted a 14.2 per cent increase in first-half revenue to 73.5 billion yuan (S$15 billion) , according to a July company statement.