BEIJING, December 13 (TMTPost)—China’s property giant Dalian Wanda Group Co.has narrowly averted an upcoming repayment of more than US$4 billion due to a delayed initial public offering (IPO) of its unit.

Credit：Visual China

Wanda has signed a new investment agreement, which allows PAG, a private asset manager, and other investors to re-invest their money at the repayment due date of an investment in 2021 after Wanda pays back their origianl stakes, according to a statement on the Chinese conglomerate’s website. With an investment of about RMB18 billion, or US$2.8 billion, PAG is one of existing investors which input around RMB38 billion in Zhuhai Wanda Commercial Management Group Co., Ltd. (Zhuhai Wanda), a commercial property management unit. Under the latest deal, Wanda will hold 40% of Zhuhai Wanda as its largest single shareholder, and a group of new and existing investors including PAG will totally control 60% of it following the new investment. While Wanda didn’t disclose the deal size, Chinese financial information service platform Blue Whale Finance learned the company will receive nearly RMB30 billion of new funds and is expected to bolster its asset value by several tens of billions of dollar.   

The new investment deal effectively avoided a looming cash crunch of Wanda. The real estate developer raised funds from pre-IPO investors in 2021 and has to repay these 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.  

Wanda disclosed last week 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.

Right after the sales announcement, Wanda was reported to be 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. Zhuhai Wanda recently told investors about the plan and the talk, but didn’t reveal which insurer is the potential buyer that it reached out, reported Chinese news media outlet The Paper..

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%.