Wanda selling theme parks and hotels in $9.3B deal

Posted July 11, 2017

The developer had closed 6.9 percent lower on Friday.

Variety offers five possible reasons for the sale, including a reduction of the (possibly massive) debt incurred during Wanda's global spending spree over the last few years, avoidance of the growing regulatory scrutiny in China, and competition from Disney.

Sunac invested in companies affiliated with the cash-strapped LeEco (樂視) empire, as Sun has said that he is seeking ways to expand beyond property into areas from healthcare to finance.

Wanda, headed by one of China's richest men, Wang Jianlin, had been one of the most acquisitive companies overseas, spending billions on a range of United States entertainment properties. "Wanda Commercial plans to pay back the majority of bank loans within this year", he was quoted saying. Everything included in the deal is in China.

"Selling assets, which is the last resort for big firms like Wanda, means that Wanda is running out of options to raise fund through normal financing channels", said Ivan Han, Shanghai-based senior analyst with financial information provider Morning Whistle.

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"Through this asset transfer, Wanda Commercial's debt ratio will be greatly reduced, all the proceeds will be used to repay loans".

The transaction is to allow Sunac and Wanda to "fully play" to their advantages, the statement said.

Shares in Wanda Hotel Development, the group's listed unit in Hong Kong, surged after the news and were trading 74 percent higher at HK$1.01 by early afternoon.

It is thought that the deal will go towards reducing Wanda's commercial debt pile.

For Wang, China's second-richest man, the deal builds on his push to shed real-estate assets to focus on collecting rent rather than developing properties. It has also been very active globally, buying USA cinema chain operator AMC Entertainment Holdings Inc and taking a controlling stake in US film studio Legendary Entertainment a year ago.