China’s Wanda sells interests in high-profile London property project
HONG KONG: Dalian Wanda Group has agreed to sell its interests in the high-profile London luxury development project, One Nine Elms, for 59 million pounds ($81 million), the latest in a string of asset sales that underscore financial strains hitting the Chinese conglomerate.
The conglomerate, which has businesses that range from real estate to football and cinemas, had initially said it wanted to transfer ownership of some its overseas assets to its holding company as part of a restructuring, keeping them within the group.
But the sale has instead gone to a unidentified third party. Bloomberg news, citing people with knowledge of the matter, said the buyer was Guangzhou R&F Properties, a firm that has also stepped up to purchase other Wanda property assets.
Wanda Hotel Development Co Ltd said in a statement it is selling its 60 percent stake in a company that owns the high-profile One Nine Elms project in London for 35.61 million pounds ($49 million). The buyer has also agreed to repay 159.5 million pounds in debt.
A separate Wanda firm, Wanda Commercial Properties (Hong Kong) Co Ltd, is also selling the remaining 40 percent stake in the property project in southwest London at the same terms.
R&F declined to comment on whether it was the buyer.
Last year, Chinese regulators told banks to stop providing funding for several of Wanda’s overseas acquisitions as Beijing looks to curb what it sees as irrational spending by some major domestic conglomerates, sources have said.
Shortly after, Wanda sold a portfolio of domestic hotels and tourism assets, including 13 theme parks, for $9 billion to R&F and Sunac China.
Wanda is also considering a Hong Kong listing for its sports assets as part of efforts to rationalise its portfolio that could also include other sales, according to people familiar with the situation.
Other flagship overseas developments – in Chicago, Los Angeles, Sydney and Australia’s Gold Coast – are also available for sale, according to one source.
Responding to a local online media report that questioned the group’s financial health, Wanda last month said its 2017 revenues had surpassed 200 billion yuan ($30 billion) and it had 200 billion yuan in cash.
Wanda bought the property in Nine Elms Lane on the south bank of London’s River Thames in 2013 to redevelop it into a hotel, residential, office and retail complex.
Last year it dropped plans to purchase a neighbouring property, Nine Elms Square which was bought instead by R&F and CC Land Holdings Ltd.
Shares of Wanda Hotel surged on Wednesday, trading 5 percent higher in afternoon trade. It said it would use the sales proceeds to repay loans and interest, and to finance other existing projects.