BEIJING, December 8 (TMTPost)—China’s property giant Dalian Wanda Group Co. is exploring more ways to ease mounting debt burden. 

Credit：Visual China

Wanda Group is in talk with an insurance company on a plan to sell Wanda Plaza shopping malls in first and second-tier cities in exchange for liquidity, reported Chinese news media outlet The Paper. Zhuhai Wanda Commercial Management Group Co., Ltd. (Zhuhai Wanda), a commercial property management unit of the conglomerate, recently told investors about the plan and the talk, but didn’t reveal which insurer is the potential buyer that it reached out, according to the report.

Wanda Plaza is a single multi-functional complex which integrates tenants from a wide range of businesses,which integrates retail, leisure, hotels and residential into one fully functional complex. As one of the world’s largest mall operators, Zhuhai Wanda manages 484 Wanda Plaza complexes as of the first half of this year. Its gross rental income from January to June totaled RMB26.32 billion, rising 4.5% year-over-year (YoY), and net rent gained 7.2% YoY to RMB13.01 billion in the same period, with the rent collection rate of 100%.

While Wanda didn’t responded to the report, the property developer has offloaded one of Wanda Plaza malls through a deal with an insurer. Beijing-based Dajia Insurance Group acquired Wanda Plaza in Zhoupu town,  the second complex Wanda has built in Shanghai. Following the deal in October, Dajia became a shareholder of the project developer of the plaza. Back in May, Dajia took over three shopping malls owned by Wanda, located in Shanghai, Xining, the capital of western China’s Qinghai province, and Jiangmen, a city in southern China’s Guangdong province, respectively.

In its previous negotiation with potential buyers of property, Wanda asked for the right to repurchase the divested assets, though the condition was rejected outright by some, The Paper learned. Wanda said it still doesn’t have initial public offering (IPO) timetable of Zhuhai Wanda, the unit it holds a 44% stake, according to the report. China’s regulator has asked the property management firm for more details on its corporate governance as part of its application for an IPO in Hong Kong. The requirement  in June increased uncertainty over timing of the IPO and raised concerns over Wanda’s liquidity.

The reported talk came right after Wanda disclosed sales of its film unit. Wanda’s founder Wang Jianlin plans to sell his 51% stake in the Chinese conglomerate’s subsidiary Beijing Wanda Investment Co., to a unit of China Ruyi Holdings Ltd., according to a filling with Shenzhen Stock Exchange on Wednesday. Once the sales complete, Wang will hand his control of Wanda Investment to Ruyi, an investment holding company that Tencent owns a 19.12% stake through its wholly-owned subsidiary. Ruyi has bought 49% of Wanda Investment for for RMB2.2 billion in July, effectively acquiring a 9.8% stake in Wanda Film Holding through the deal.  As of the third quarter of the year. Wand Investment holds a 20% stake in Wanda Film as a controlling shareholder. And the upcoming deal will turn Ruyi into the largest shareholder of Wanda Film and Wang to be the second holder with a 10.2% stake.

Wednesday’s filling didn’t disclose the deal size. Wang Jianlin is expected to receive at least RMB2.47 billion in cash through the sales, given RMB12.64 of Wanda Film’s average stock price in twenty days before trading suspension and estimates based on an 80% discount of the market value. However, this is still a drop in the bucket for Wang. The billionaire has to repay pre-IPO investors RMB30 billion and pay an interest rate of 12% for the amount, which totaled more than RMB40 billion, if Zhuhai Wanda fails to go public by the end of the year. Wanda also faces challenges of repayment for its three offshore bonds totaling US$1.3 billion. The company recently obtained creditors’ assent to extend payment date of its US$600 million note from January 29 2024 to December 13 the same year. Other two notes will mature on January 20 2025 and February 13 2026, respectively.   

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