Wanda selling US$5.4b property unit stake, to seek listing 'soon'

[SHANGHAI]Dalian Wanda Group Co said it is selling a US$5.4 billion stake in its property arm to 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.

Chinese internet giant Tencent Holdings Ltd is leading the acquisition of the 14 per cent 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 per cent 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 US$4.4 billion privatization. The US$5.4 billion investment represents a 23 per cent gain from the 2016 sale price in what was the city's biggest-ever going-private deal.

Under terms of the 2016 sale to private equity investors, Mr Wang would have had to pay back investors who backed the buyout with a 12 per cent annual return for domestic investors, and 10 per cent for those overseas, should the company fail to list on China's mainland by September 2018.

E-commerce provider JD.com Inc, Sunac China Holdings Ltd and Suning Commerce Group Co - a retailer backed by e-commerce giant Alibaba Group Holding Ltd are also participating in the investment announced Monday.

The 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 per cent after the company confirmed the sale of two Australia property projects for A$315 million (S$334.5 million) in the latest of a wave of deals intended to raise cash abroad for the formerly acquisitive conglomerate. Last week, Mr Wang said Wanda wouldn't experience any defaults and intended to pay off overseas debt through all necessary means, including asset disposals.

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