Billionaire Wang Jianlin agreed to sell his Australia assets as his Dalian Wanda Group Co. continues to shed assets acquired in a spree that once made the founder China’s richest man. On 29 Jan 2018, Wanda Hotel Development Co Ltd (HKSE:0169) announces that it has reached an agreement with AWH Investment Group Pty Ltd to dispose all of the shares in its Australia subsidiary for AU$315 million (HK$1.919 billion), and the buyer will take on Wanda’s Australia debt of AU$815mil (HK$4.966B). The two projects involved are located in Gold Coast and Sydney, which Wanda owns 55% and 100%, are estimated to be valued at AU$317mil and AU$803 million respectively. The agreement also stipulates that Wanda Hotels & Resorts will assume the management right of the two projects once completed under the Wanda Vista Hotel brand.
Shares of Wanda Hotel Development (HKSE:0169) will resume trading on 30 Jan.
China Business Journal reported that the Gold Coast project is the only government approved beach front 5-star hotel and apartment development. The project gained approval on December 2014 and expected to complete in 2019, it covers an area of 146,200 square metres with 3 high-rise buildings in the core of Surfers Paradise. Once completed, the 5-star hotel and two blocks of luxury apartment will be a landmark of Gold Coast.
The Sydney project is located in the prime of the CBD which covers an area of 97,500 square metres of redevelopment. The project gained approval on June 2017 and expected to complete on 2021, demolition work started on June 2017. Once completed, the 194-metre building will boast as a new landmark of Sydney which hosts a mixture of hotel, residential and retail usage.
The disposal will generate a revenue of HK$556 million (AU$88.68 million) for Wanda Group of which HK$4.06 billion (AU$647 million) will be used for repaying loans and interest, while another HK$27 million (AU$4.31million) for the transaction cost of the projects. The estimated net proceed will be HK$43 million (AU$6.86 million).
On 16 Jan, Wanda Hotel Development sold a 60 percent stake in Wanda’s London asset for £35.6 million (AU$63.24 million). Through the sale of the Australia and London assets, Wanda is expected to cash in HK$5.36 billion (AU$855 million). The three deals allow Wanda to pay off the majority of its overseas debts and its financial position has improved markedly with a debt reduced to HK$500mil (AU$79.75mil). The move tallies with Group Managing Director Wang Jianlin’s claim “to repay all overseas interest-bearing debts” on 20 Jan company’s AGM.
The announcement also mentioned that Wanda is actively seeking buyers for its Chicago Wanda Vista Tower to further reduce its overseas debts. Wanda’s annual report outlined that the Chicago Vista Tower will stand 350 metres tall with an area of 170,000 square meters, and will be the Windy City’s third tallest building upon completion. The tower will be the home of a 93-storey five-star hotel and luxury condos. As of the end of June 2017, 44% of project is pre-sold and it is expected to be completed in 2020.
Wanda emphasises that it will not downsize existing business in China after selling the America project.