Wanda founder Wang to buy majority stake in Wanda Hotel in $470 mln deal (updated)

Wanda Hotel Development

04/12/2017 09:51

* Wanda Commercial to transfer 65 pct in Wanda Hotel to 
Wang's 
unit 
    * Priced at HK$1.20/shr, deal is worth HK$3.67 bln 
    * Expected to boost liquidity at Wanda Commercial Properties 
Co 
 
 (Adds details of deal, analyst comment and background) 
    By Clare Jim 
    HONG KONG, Dec 4 (Reuters) - Dalian Wanda group's 
billionaire founder Wang Jianlin has agreed to buy a majority 
stake in Wanda Hotel Development Co  0169.HK  for $470 million 
from Wanda Commercial Properties, a move that is expected to 
boost liquidity at the indebted property firm. 
    In a statement to the stock exchange on Monday, Wanda Hotel 
said Wanda Commercial Properties Overseas, which is about 60 
percent owned by Wang, will transfer its 65.04 percent stake to 
Wanda Investment Holding Co Ltd - 100 per cent owned by Wang - 
at HK$1.20 a share.  
    The deal is worth HK$3.67 billion ($469.65 million) and is 
expected to shore up the finances of Wanda Commercial Properties 
Co Ltd, which wholly owns Wanda Commercial Properties Overseas. 
According to ratings firm S&P, Wanda Commercial Properties Co 
Ltd had total debt of 279 billion yuan ($42.17 billion) as of 
end-June.   
    Beijing's crackdown this year on high-profile overseas 
ventures has drawn in several groups such as Wanda, forcing the 
conglomerates to reduce their dealmaking ambitions.  
    Wanda announced plans earlier this year to sell most of its 
tourism projects and hotels in China to Sunac China and 
Guangzhou R&F Properties for about $9 billion.  urn:newsml:reuters.com:*:nL4N1L81JQ 
    S&P analyst Dennis Lee said Monday's deal was different from 
the sale to Sunac & R&F because it was offshore money. 
    "We were concerned about the offshore situation of Wanda 
Properties but with more liquidity (from this deal) it will help 
to repay its bank borrowings."  
    He added that S&P's latest downgrade in September this year 
had triggered a change of covenant and the company was in 
discussions with banks on a resolution. 
    Last week Fitch Ratings affirmed the ratings of Wanda 
Commercial Property Co Ltd at 'BBB' after it was given 
permission by Chinese regulators to sell bonds worth $1.5 
billion overseas. The ratings agency, however, left the group on 
"watch negative" - meaning it could be downgraded - citing its 
"continued lack of definitive funding channels".   
    Wanda Hotel shares closed up 10.5 percent at HK$1.58 on 
Monday after the announcement. Wanda shares have jumped nearly 
50 percent since last Monday's close. 
    Last month, Wanda Hotel said it was open to "business 
opportunities" related to its portfolio of landmark overseas 
properties, although no sale talks were under way.  urn:newsml:reuters.com:*:nL3N1NR23I 
    In August, Wanda Hotel announced plans to buy assets worth 
over $1 billion, including a  theme park operator and a hotel 
operator owned by sister companies, while also selling to its 
parent its interest in four foreign landmark property 
developments. But in September, the property sales and the theme 
parks purchase were excluded from the deal. 
    Wanda Hotel shareholders are scheduled on Friday to vote on 
the purchase of the hotel operating business for HK$878 million. 
($1 = 6.6166 Chinese yuan renminbi) 
($1 = 7.8144 Hong Kong dollars) 
 
 (Reporting by Clare Jim; Editing by Jennifer Hughes and 
Muralikumar Anantharaman) 
 ((clare.jim@thomsonreuters.com; +852 2912 6653; Reuters 
Messaging: clare.jim.thomsonreuters.com@reuters.net)) 
 
Keywords: WANDA HOTEL RESTRUCTURING/