China's Dalian Wanda carries out major restructure of hotel ownership
Wang Jianlin, China’s richest man and founder of Dalian Wanda, has begun a major restructuring of his property interests, selling RMB705bn (€901m) worth of assets into his Hong Kong-listed unit, Wanda Hotel Development.
The restructuring involves selling assets owned by Dalian Wanda in the UK, the US, Australia and China.
The move comes in the wake of heightened speculation that the Chinese Government has stepped up pressure on selected companies, including Anbang and Dalian Wanda, to sell overseas assets.
The two companies have been singled out, according to media reports, because of high-profile multi-billion acquisition sprees overseas in recent years.
The unspoken question in property circles is whether this move will appease Chinese authorities or billionaire Wang will have sell assets.
In a filing to the Hong Kong stock exchanges, Wanda Hotel said it will acquire Wanda Culture Travel Innovation Group for RMB630bn.
Wanda Hotels will also acquire Wanda Hotel Management from Dalian Wanda Commercial, at a price provisionally set at RMB750m.
Both Wanda Culture Travel and Wanda Hotel Management are majority-owned by Wang and his family.
As part of the plan, Wanda Hotels will sell its interests in four Wanda subsidiaries to Dalian Wanda Commercial for an amount yet to be decided.
These subsidiaries include Wanda Properties Investment, which owns projects in Guilin, China, and three Wanda companies incorporated overseas: Wanda International Real Estate Investment, in London; Wanda Americas Real Estate Investment, in Chicago; and Wanda Australia Real Estate Investment.
Yesterday, the head of Wanda Australia, John Wei, denied reports that Wanda’s Australian projects, with a combined value of AUD2bn (€1.34bn), were up for sale.
In 2015, Dalian Wanda acquired a prime office building at Sydney’s Circular Quay from Blackstone for AUD415m, and demolition has begun to build a AUD1bn 60-storey luxury hotel and apartment tower.
Dalian Wanda is developing another AUD1bn project at Surfers Paradise on Queensland’s Gold Coast, a major tourist destination.
The Hong Kong filing says Wanda Hotel will pay “either cash, or issue shares and/or convertible bonds” for the assets.
The chairman of Wanda Hotel, Ding Benxi, said these transactions “may or may not” proceed and the final terms, which are still subject to negotiation among the parties, “have yet to be finalised”.
Ding added that the final terms “may deviate” from those set out in the framework agreement.
He said that in the event that the legally binding formal agreement is signed, a further announcement will be made in compliance with Hong Kong’s listing rules.