Hong Kong, Sydney: Chinese conglomerate Dalian Wanda Group has agreed to sell its two Australian projects to a China-backed developer for a total of A$1.13 billion (Dh3.3 billion or $913 million) in equity and assumed debt.
Wanda Group will get A$315 million for the sale, and the buyer will also repay A$815.1 million in assumed debt on behalf of the company, according to a statement by Wanda Hotel Development Co Ltd, the Hong Kong-listed unit of Wanda Group, on Monday.
The deal, signed on January 18, comes just days after Wanda sold a high-profile London luxury development project for around $81 million, the latest in a string of asset sales that underscore financial strains hitting the Chinese conglomerate.
Wanda Group will cash in HK$10.32 billion ($1.3 bln) and make a total gain of HK$1.28 billion after the disposal of London, Sydney and Gold Coast developments.
The buyer is AWH Investment Group Pty Ltd, the statement said, an associate of China-backed Australian property and investment group Yuhu Group.
Yuhu, in an emailed statement to Reuters confirming the purchase, said the projects would create over 1,500 jobs in Australia.
“Consistent with the company’s strategy to deleverage, the company considers that the disposal represents an opportunity for the group to realise its investment in both Gold Coast Project and Sydney Project and would benefit the group by strengthening the liquidity and financial position of the group,” Wanda Hotel said.
Wanda Hotel said the disposal of the company, which owns the One Circular Quay in Sydney and 55 per cent of the Jewel Resort on the Gold Coast which are both under development, would result in a gain of around HK$556 million for Wanda Group.
Wanda Hotel owns 60 per cent of the company, while Wanda HK owns 40 per cent. Both are subsidiaries of Wanda Group.
Wanda Hotel will also use around HK$4.1 billion of the proceeds to repay loans and interest due to Wanda HK, it added.
Shares of Wanda Hotel will resume trading on Tuesday. They have been suspended since January 19.
The sales are expected to lessen financial strains on Dalian Wanda Group, caused by a major acquisition spree, by helping Wanda HK to meet upcoming debt deadlines.
China’s regulators last year told banks to stop providing funding for several of Wanda’s overseas acquisitions, sources have said, part of a crackdown on what Beijing sees as irrational spending by some domestic conglomerates. Since then, Wanda, whose businesses range from real estate to football and cinemas, has embarked on a string of asset sales.
