Wanda to cede control of its mall unit in 60 billion yuan deal
DALIAN Wanda Group has agreed to cede control of its shopping mall unit in a deal worth 60 billion yuan (S$11.4 billion), implementing a December agreement to restructure Zhuhai Wanda.
Investors led by PAG will hold a combined stake of 60 per cent in Newland Commercial Management, a newly formed holding company of Zhuhai Wanda Commercial Management Group, according to a statement on Saturday (Mar 30). Dalian Wanda Commercial Management Group will control the remaining 40 per cent.
The deal “reflects the expectation and recognition of Newland’s long-term growth potential by international institutional investors”, said David Wong, PAG partner and co-head of private equity.
Other investors include Citic Capital, funds managed by Ares Management, the Abu Dhabi Investment Authority and Mubadala Investment Company.
The investment will facilitate corporate governance independent of Newland’s former parent, provide better incentives for its management, and support continued operational improvement, according to the statement.
The company manages 496 large-scale shopping malls in 230 cities across China, with about 70 million square meters of floor space under management, it said.
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Billionaire founder Wang Jianlin gave up control of Zhuhai Wanda last December, as part of a landmark agreement to avoid repaying pre-initial public offering (IPO) investors. Under the terms of the original investments, Wanda agreed to repay investors 30 billion yuan plus interest if Zhuhai Wanda could not get its IPO done by the end of 2023.
When that deadline came and there was still no listing, a new agreement was proposed, where Wang relinquished control and pre-IPO investors took a bigger stake – 60 per cent combined. The pre-IPO investors include PAG, which put in US$2.8 billion, Ant Group, Citic Securities and Tencent Holdings.
The deal announced on Saturday carried no earn-out provisions, nor did the investors request a listing date from Wanda regarding the mall operation business, Cailian reported, citing people familiar with the matter.
Wanda was once seen as one of the few high-quality Chinese issuers in the junk-bond market, thanks to its focus on commercial real estate as well as its asset-light property management business. The conglomerate came under pressure after borrowing costs surged and Beijing cracked down on the property sector.
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