Wanda in US$9.3b real estate deal
IN what is believed to be one of the country’s largest real estate deals, Sunac China Holdings Ltd
is to acquire hotels and cultural and tourism projects from Dalian Wanda Group for 63.2 billion yuan (US$9.3 billion).
A joint statement on Wanda’s website yesterday said Sunac, one of the country’s largest real estate developers, is to pay 29.6 billion yuan for a 91 percent stake in 13 Wanda projects while 33.6 billion yuan will be spent purchasing 76 Wanda hotels including in Beijing and Wuhan.
Wanda Chairman Wang Jianlin told financial magazine Caixin that the deal would cause debt at Wanda’s commercial property arm to “drop greatly.”
He was quoted as saying: “The funds returned from this will all be used to pay back loans. Wanda Commercial plans to pay back the majority of bank loans within this year.”
Wanda was among the most acquisitive players in a flood of Chinese money overseas that raised concerns over “irrational” investments.
The Sunac deal highlights a quandary faced by Chinese corporations that bet big on overseas acquisitions but now face difficulty paying off debts.
Wanda admitted last month that China’s banking regulator was looking into potentially risky loans it held.
It said other domestic companies that invested aggressively overseas were also being scrutinized, including Rossoneri Sport Investment Lux — a consortium that purchased football club AC Milan — Club Med’s owner Fosun Group, and HNA Group.