At the last moment, Wang Jianlin lifted the crisis!
According to Dalian Wanda’s official website, on December 12, 2023, PAG and Dalian Wanda Commercial Management Group jointly announced the signing of a new investment agreement. PAG will cooperate with other investors to reinvest in Zhuhai Wanda Commercial Management after its investment redemption period expires in 2021. Existing investors invested about 38 billion RMB in Zhuhai Wanda Commercial Management in August 2021, of which PAG’s investment is about 2.80 billion US dollars (about 18 billion RMB). Existing investors enjoy redemption rights in the original investment arrangement.
This means that before the deadline for Zhuhai Wanda Commercial Management to list in Hong Kong, Wanda’s listing pressure has been eliminated.
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Picture source: Screenshot of Dalian Wanda’s official website
Wanda’s "urgent need" solution
Wanda said that according to the new agreement, Dalian Wanda Commercial Management holds 40% of the shares, making it the single largest shareholder. Pacific Alliance and several existing and new investors will participate in the investment, with a total of 60%. However, Wanda did not disclose which new investors will enter. Some analysts believe that the possibility of insurance capital entering cannot be ruled out, and some original investors may withdraw.
The 21st Century Business Herald reporter noticed that in the new agreement, the direct shareholding ratio of Dalian Wanda Commercial Management will drop significantly from the existing 70.15%, while the shareholding ratio of investors will rise sharply from 29.84%.
Wanda said that Wanda will work with important shareholders such as Pacific Alliance to further optimize the corporate governance of the company, maintain the stability of the management team, and jointly support the long-term development of the company. The new agreement reflects investors’ high recognition of the growth potential of Zhuhai Wanda Commercial Management and its operating capabilities.
In September 2021, Zhuhai Wanda Commercial Management, which is seeking to list in Hong Kong, signed a share transfer agreement with 22 investors including Zhuhai SASAC, Tencent, Country Garden, CITIC, Ant Financial, China Merchants Group, Warburg Pincus, and Zheng Yutong’s family. Among them, some investors signed a gambling agreement with Wanda Commercial Management. According to the agreement, Zhuhai Wanda Commercial Management needs to complete the listing by the end of 2023, otherwise it will have to pay investors an equity repurchase at an annual internal rate of return of 8%. It is reported that the repurchase payment will reach 30 billion yuan.
However, due to the weak environment in the Hong Kong stock market, the listing of Zhuhai Wanda Commercial Management has been delayed repeatedly. And as the "limit" of gambling is approaching, this new investment agreement can be described as solving Wanda’s "urgent needs".
Zhuhai Wanda Commercial Management has submitted to the Hong Kong Stock Exchange four times on October 21, 2021, April 22, 2022, October 25, 2022, and June 28, 2023. On November 10, Zhuhai Wanda Commercial Management updated its listing application form on the Hong Kong Stock Exchange. According to the latest announcement, Zhuhai Wanda Commercial Management has agreed to terminate the appointment of Credit Suisse (Hong Kong) Limited as the overall coordinator of its listing application, effective from November 9, 2023. As of now, there are two joint sponsors of the company, namely CITIC CLSA Securities Limited and J.P. Morgan Securities (Asia Pacific) Limited. Wanda has since confirmed that UBS has replaced Credit Suisse as the overall coordinator of Wanda Commercial Management.
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Image source: Visual China
Zhuhai Wanda Commercial Management for three consecutive years
Exceeding performance targets
Zhuhai Wanda Commercial Management currently manages 494 large commercial centres in 227 prefecture-level and above cities across the country. The number of commercial centres managed by Zhuhai Wanda Commercial Management has grown from 417 to 494 in the past two years, an average annual growth rate of about 9%. Zhuhai Wanda Commercial Management is now the world’s largest commercial management company in terms of commercial area under management.
Dalian Wanda said that since existing investors invested in 2021, Zhuhai Wanda Business Management has exceeded its performance targets for three consecutive years. After-tax income in 2021 is 23.50 billion yuan, 2022 is 27.10 billion yuan, and 2023 (estimated) is 29.30 billion yuan, with an average annual growth rate of about 12%. After-tax profit in 2021 is 5.30 billion yuan, 2022 is 7.50 billion yuan, and 2023 (estimated) is 9.50 billion yuan, with an annual growth rate of 34%. In the past three years, the company has paid a total of about 10 billion yuan in taxes, and dividends to shareholders are 4.60 billion yuan in 2021, 6.70 billion yuan in 2022 and 8.50 billion yuan in 2023 (estimated).
Wang Jianlin previously sold off assets
In order to solve the liquidity problem, some time ago, Wang Jianlin also sold off assets.
On December 6, Wanda Film announced that the 51% stake of the company’s controlling shareholder, Beijing Wanda Investment Co., Ltd. was to be transferred to Shanghai Ruyi Investment Management Co., Ltd., a wholly-owned subsidiary of China Ruyi Holdings Co., Ltd. In other words, Wang Jianlin sold Wanda Film. If the deal is completed, plus the previous transaction, Shanghai Ruyi will hold 100% of Beijing Wanda Investment, thereby indirectly holding 20% of Wanda Film and becoming the actual controller of Wanda Film.
According to the surging news on the 7th, on December 6th, the reporter learned that during the recent communication with investors, Zhuhai Wanda Commercial Management revealed that Wanda Group plans to sell its Wanda Plaza in first- and second-tier cities in exchange for liquidity, and is currently negotiating with insurance institutions. However, Wanda did not disclose which insurance institution it contacted. At the same time, there is still no IPO timetable for Zhuhai Wanda Commercial Management’s listing in Hong Kong.
In addition, on October 26, there was a market news that "Zhuhai Wanda Commercial Management intends to delay its listing on the Hong Kong Stock Exchange and is discussing providing compensation to investors to avoid triggering a repurchase." In response, people close to Wanda Group told the "Daily Economic News" reporter, "The current listing work is advancing normally. Whether it is contacting investors or applying for an IPO normally, it is a daily work, and there are no new changes."
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● According to Daily Economic News, Dalian Wanda official website, The Paper, 21st Century Business Herald, Securities Times, China Fund News, etc
Original title: "Last minute! Wang Jianlin, there is big news"
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