Wanda in $12.8b sale to slash debt
SHANGHAI: Chinese conglomerate Wanda yesterday said it will sell dozens of hotels and other projects to developer Sunac China for US$9.3 billion (S$12.8 billion) to slash debt, two weeks after acknowledging it was being probed following heavy overseas investments.
It is China's largest-ever property deal, according to Bloomberg News, and it will see Sunac buy 76 hotels outright and take a 91 per cent stake in 13 other "cultural and tourism projects" within China, the companies said.
Wanda, headed by one of China's richest men, Mr Wang Jianlin, was among the more acquisitive players in a flood of Chinese money overseas that raised concerns in Beijing over "irrational" investments.
He told financial magazine Caixin that the deal would cause debt at Wanda's commercial property arm to "drop greatly", without giving specifics.
"The funds returned from this will all be used to pay back loans. Wanda Commercial plans to pay back the majority of bank loans within this year," Mr Wang was quoted saying.
The deal highlights a quandary faced by Chinese corporations that bet big on overseas acquisitions but now face difficulty paying off debts.
Beijing last year began rolling out restrictions to curb overseas capital flight, which analysts said raises funding costs for companies such as Wanda, because lending to them is now viewed as riskier.
Wanda admitted last month that China's banking regulator is looking into potentially risky loans it held. - REUTERS