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Wanda Group to sell China tourism projects, hotels to Sunac for $9.3 bn

Shares in Wanda Hotel Development surged more than 150 percent after the news

Reuters  |  Hong Kong 

Dalian Wanda Group
Wang Jianlin, founder of Dalian Wanda Group

Chinese giant plans to sell projects and in the country to for $9.3 billion, as it dials back its theme-park ambitions and brings down its pile. 

The sale — the second-biggest real estate deal ever in according to Reuters data — will help strengthen Wanda’s case for a mainland listing after its unit delisted from last year. For Sunac, it would mean ownership of a wide portfolio of developments at a time when it is spending billions on and technology assets. 

Wanda said it would offload 91 per cent of thirteen cultural projects, which usually include theme parks and leisure complexes, and 76 to the acquisitive Tianjin-based developer for 63.18 billion  

After the sale, Wanda will, however, continue to play a role in operating and managing the projects. 

Wanda, which also has interests in films and sports, had plans to build at least 20 cultural projects around Its billionaire owner Wang Jianlin had last year said his “wolf pack” of parks would beat rival Walt Disney Co. 

“This (deal) signifies a retreat from Wanda’s previous strategy in cultural tourism, and marks a pivot to an asset-light strategy,” said Qin Gang, senior researcher at State Information Centre, a government-linked think tank. 

Beijing has been encouraging development of cultural theme parks as part of a local drive, tapping consumers’ growing budget for entertainment. There are over 300 such facilities in China, with most struggling to turn a profit. 

Wanda’s parks are still under construction, except three that have been completed. Two that opened in Nanchang and Hefei last year do not rank in the top 20 by attendance for Asia Pacific, consultancy AECOM’s 2016 theme park index shows.  The firm, which had earmarked a more than 300 billion ($44 billion) investment for its cultural and projects, did not give a reason for the sale to Sunac, but local business magazine Caixin quoted Wang as saying the deal would ease the burden on Wanda’s unit. 

“Through this transfer, Wanda Commercial’s ratio will be greatly reduced, all the proceeds will be used to repay loans. Wanda Commercial plans to repay most of the bank loans this year,” Wang told Caixin. 

Analysts said the lower load could help Wanda’s plans to list the unit in Shanghai and to attract a higher valuation. S&P downgraded Wanda Commercial in December citing rising financial leverage and slower-than-expected disposal at China’s largest commercial developer. Another downgrade would push the rating into “junk” category. 

The group has been investing heavily in entertainment, leisure and financial businesses and the buying spree has drawn the attention of Chinese regulators, who ordered lenders last month to assess exposure to overseas deals by Wanda, HNA Group, Anbang Insurance and Fosun. 

Wanda has been very active globally, with deals for cinema chain AMC Entertainment Holdings Inc, Hollywood film studio Legendary Entertainment, Infront Sports & Media AG and Spanish soccer team Ateltico Madrid. 


too has been shopping. 

In the past year, boss Sun Hongbin has led the group on an spree, including $2.1 billion for the real-estate assets of Legend Holdings, parent of PC-maker Lenovo, and $2.2 billion for a stake in Leshi Internet, a unit of LeEco — a Chinese Netflix-to-Tesla-like conglomerate. The stake in Wanda cultural and projects will cost 29.58 billion The price tag for the is 33.6 billion The firms are expected to sign an agreement by the end of this month. 

will pay for this from its cashpile that stood at over 90 billion at the end of June, Caixin quoted Sun as saying. It had total liabilities of 168.6 billion at the end of 2016, versus 64.5 billion the year before. 

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Tue, July 11 2017. 00:37 IST